Non-owner car insurance

Learn how drivers who don’t own a ride can still get the liability protection they need.

Colin Lalley 1600

Colin Lalley

Published January 24, 2018

You might need car insurance, even if you don’t own a car. You don’t need to own a car to drive one, but you can’t just get behind the wheel without some type of insurance to back you up. If you rent or drive other people’s cars frequently, you may want to consider non-owner car insurance.

Non-owner car insurance provides liability coverage if you’ll be driving a car that you don’t own, or isn’t registered or insured in your name. But the question is: Do you need it? First, you’ll want to learn about what non-owner car insurance can do for you, when you should or shouldn’t sign up for a policy, and what some of the limitations are.

What is non-owner car insurance?

Non-owner car insurance, sometimes called non-owned vehicle insurance, provides limited insurance in instances where you have a personal vehicle that you don't own or don't regularly use. Essentially if you’re going to be driving a car sometimes but not daily (or not even weekly or monthly) but you still want to be protected, you can look into non-owner vehicle policies.

How does non-owner car insurance work?

Non-owner car insurance works basically the same way as standard auto insurance, but since you don't own the car there are a few differences on what's covered and what isn't.

What does non-owner car insurance cover?

Non-owner car insurance primarily offers liability coverage, meaning it covers bodily injury (BI) or property damage (PD) that other people incur from an accident you caused.

Sometimes, you can add these coverages to a non-owner car insurance policy:

  • Personal Injury Protection (PIP): Covers medical expenses and lost wages you incur as the result of an accident you caused.
  • Uninsured/underinsured motorist coverage: Covers any medical expenses or property damage you incur as the result of an accident caused by someone with little to no insurance.

What does non-owner car insurance not cover?

Because there’s no vehicle insured under a non-owner policy, it typically doesn’t include the standard coverages in most car insurance policies, like:

  • Collision: Covers damage done to your vehicle in an accident you caused.
  • Comprehensive: Covers damage done by anything else. So, say, your car gets stolen or a tree falls on top of it on or off the road.
  • Towing
  • Rental costs

Get involved in a collision, and your non-owner insurance policy will cover damages to the other party’s car, not the car you’re driving.

There are other limits to non-owner car insurance. For instance, it only covers you; you can’t put an additional driver on your policy.

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How much does non-owner car insurance cost?

The cost of car insurance is based on a laundry list of things.

For starters, it’ll vary by state, since each one sets its own coverage requirements — you can go here to find out how much auto insurance coverage is required in your state.

But rates are also affected by:

  • Zip code
  • Age
  • Gender
  • Marital status
  • How many miles you drive
  • Credit score
  • Driving record

However, most non-owner insurance policies cost less than a standard car insurance policies, which are, on average, about $900 a year.

Who needs non-owner car insurance?

If you own your vehicle, seek a regular auto insurance policy. (And if you drive for Uber or Lyft, add rideshare insurance.) But if don't own a car, you may want to consider non-owner insurance if these situations apply:

  • You drive someone else’s car frequently. Generally speaking, when you drive another person’s car, their auto insurance policy covers you. Non-owner insurance is an extension of their policy’s liability coverage: If you get into an accident while driving their car and the damages exceed what their policy will pay, your non-owner policy will cover the rest. A friend or relative’s auto insurance coverage may vary from the bare minimum to the absolute maximum. Your non-owner car insurance will make sure you have enough coverage so you don’t pay out of pocket in the event of an accident.

  • You rent cars frequently. Many states require you to carry liability insurance when renting a car. Most drivers buy this from the rental car company, but the rental car coverage you get at their desk is often more expensive and offers less protection than a non-owner insurance policy. Buying a non-owner policy and declining liability coverage when you rent a car may be a more cost effective way to protect yourself if you rent more than a week or so per year.

The same goes for car-sharing services like Zipcar; you’ll get some coverage with your subscription, but a non-owner policy will add supplementary liability protection in case damages exceed what a Zipcar policy will pay.

  • You’re required to have insurance after a DUI. Accident or not, a DUI or similar substance abuse conviction can pose serious consequences. It’ll land on your criminal record, and depending on the severity of the incident, can see you getting your license revoked for an extended period of time. When this happens, you’ll garner SR-22 status, named for the form you need to fill out that requires you to have auto insurance, even if you have no license and aren’t allowed to drive. Thankfully, the law will accept you having even the most minimal non-owner car insurance policy just to prove you have some sort of coverage until your license is reinstated.

  • You’re in between cars. If you find yourself car-less while saving up or shopping for a new car after yours has died or been totaled, you may want to maintain insurance coverage if you don’t want your premiums to rise once you decide on a new set of wheels. Let your auto insurance coverage lapse for even a short period of time, and you could be considered "high risk" and charged higher rates by carriers once you go to sign up for a new policy with a new car on the plan. A non-owner policy fills that gap and tells insurers that you’ve gone through the trouble of staying covered continuously.

Who doesn't need non-owner car insurance?

There are times when non-owner car insurance doesn’t make sense:

  • You borrow cars very infrequently. Taking out an entire policy and paying regular premiums -- no matter how affordable -- is a waste of money if you find yourself borrowing someone’s car only once a year. Your best bet to stay covered is to avoid a non-owner policy and see if you can be added as a driver on the vehicle owner’s policy. It could mean borrowing a parent’s car or sharing a car with a spouse where they’re the primary policyholder, and their insurance provides better coverage.

  • You’re borrowing a car for a long period of time. If your roommate is taking a summer-long study abroad across Europe and leaving their car with you for several months, you start to veer into insurance needs that a non-owner policy can’t meet. In this case, while you’re not the vehicle owner you’re the primary driver, and a regular insurance policy, even for one season, would provide the necessary comprehensive, collision and liability coverage missing from a non-owner policy.

How do I get non-owner car insurance?

Some of the most popular car insurance companies that offer non-owner insurance are Geico, State Farm, Nationwide, The General, and USAA.

Before you buy, check with a prospective insurer about what they consider a "non-owned vehicle" and what constitutes "regular use." Some insurers, for instance, won’t extend a non-owner car insurance policy to someone who lives with an actual car owner.

Getting non-owner car insurance without a license

While there are instances when you can get car insurance without a driver’s license, this isn't one of them, because you're ostensibly planning on driving the car, and driving without a license is illegal.

But what if you don’t have your driver’s license? Finding auto insurance when you’ve got a learner’s permit is a double-edged sword: It can be difficult to get insured until you’ve earned your driver’s license, but you need insurance before you can drive.

If you’re a teen with a driving permit, your parents’ car insurance provider may allow them to add you onto their policy, at least until you obtain your license and can get your own insurance. Once that time comes, decide the type of insurance you need. If you’ll be borrowing their car, you’re best suited to non-owner insurance; if you’ll be getting your own first car, a full car insurance policy is the better choice.

Likewise, if you’re an adult learning to drive for the first time, you may be able to be added to the policy of a spouse, significant other or a friend if you’re a learner’s permit holder.

If you’re an adult permit holder, getting insured might prove more difficult, but not impossible. Check around with carriers who specialize in high-risk policies, or who’ll allow you to get added to the policy of the primary vehicle driver -- usually the person who holds the main car insurance policy. The right insurance company will be willing to cooperate and add an unlicensed driver on without raising your premiums too high.

Not owning a car or having no driver’s license shouldn’t deter you from finding auto insurance or giving up on driving a car altogether. A non-owner insurance policy may be the temporary measure you need to confidently hit the road.

Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.