Non-owner car insurance is pretty straightforward: It protects you when you don't have your own car but cause an accident while driving a borrowed or rented vehicle. Non-owner car insurance typically provides liability insurance, although some insurers may also offer personal injury protection, medical payments and/or uninsured/underinsured motorist bodily injury coverage as well.
If you buy the coverage, you are then qualified to use it in the event of an accident. That's when the liability protection comes into play - without that coverage, you could be liable for the costs associated with an accident if you're found at fault. Non-owner insurance does not include comprehensive and collision protection or reimbursements for towing or a rental car following an accident.
Keep in mind that any vehicle you drive - like one you borrow from a friend - must be insured by the owner. It's illegal to drive a car without insurance. A non-owner policy would be secondary to that insurance and protect your assets if needed following an accident.
In defining a non-owner policy, these qualifications are typically specified by the insurance company when you purchase the coverage:
- Bodily injury liability, property damage liability, medical payments, uninsured motorist and underinsured motorist are the only coverages available, depending on the state.
- A non-owner policy provides car insurance for an individual who does not own a vehicle.
- Coverage does not extend to household members and only applies to the person listed on the declarations page.
- Physical damage coverage (comprehensive and collision protection) is not available on a non-owner policy.
When it comes to buying a policy, non-owner car insurance is less expensive than regular insurance. But the price does vary from company to company. Costs tend to range from 10 percent to 80 percent of what you'd pay for a standard auto policy, says Jarrett Dunbar, a spokesman for Nationwide. "Much depends on how often the customer has access to a car, how that car will be used and what age the operator is," Dunbar says.