Guide: What is non-owner car insurance coverage?

Non-owner car insurance is designed for people who need insurance but don’t own a car. It’s affordable and easy to get. Among the many types of car insurance, non-owner car insurance typically costs less than a standard policy because it only covers the driver’s liability in the event of an accident and doesn’t follow a vehicle.

Another good piece of news? Non-owner car insurance doesn’t have a deductible, so you don’t have to pay any money before your policy kicks in when you file a claim. And you can get non-owner car insurance for $325 a year — less than the cost of your cell phone.

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Contents

Table of Contents

Table of Contents

• What is non-owner car insurance?
• Do I need non-owner car insurance?
• Pros and cons of non-owner car insurance
• How does non-owner car insurance work?
• People also ask
• Who needs non-owner car insurance?
• What does car insurance without a car cover?
• When shouldn’t you buy non-owner auto insurance?
• How much does non-owner car insurance cost?
• Non-owner car insurance costs in each state
• Who has the cheapest non-owner car insurance?
• How do I buy a non-owner car insurance policy?
• Difference between non-owner insurance and standard car insurance 
• FAQs
• Resources & Methodology

What is non-owner car insurance?

Non-owner car insurance can be purchased by high-risk drivers who must buy a liability insurance policy to keep their driver’s license, those who rent cars frequently or those who must maintain continuous coverage.

A non-owner insurance policy costs less than an owner’s policy. The average cost of a non-owner car insurance policy is $325 per year. The low rate is because a car insurance company insuring a non-owner driver’s risk is lower than that of a car owner who drives daily.

However, the premium amount depends upon typical rating factors, such as your driving record and where you live.

Do I need non-owner car insurance?

Here are a few instances when you may want a non-owner insurance policy:

• When you rent a car, the policy serves as primary liability coverage. However, you would still need to buy the collision damage waiver to pay for repairs to the rental car if your credit card company does not automatically do so.
• If you maintain continuous coverage, you avoid a gap in your insurance history that labels you as a high-risk driver, resulting in higher rates when you buy your next car insurance policy.
• If you borrow other people’s cars or use a car-sharing service.
• If you drive a company car for business and personal use.
• As a high-risk driver, a non-owner policy is typically needed to satisfy conditions to receive or reinstate a driver’s license. If you must file an SR-22 or FR-44 with the state – an insurance company’s guarantee that your coverage is current – a non-owner SR-22 insurance policy can satisfy that mandate.

Pros and cons of non-owner car insurance

Non-owner car insurance comes with both pros and cons, here are a few:

Pros:

• Provides liability coverage to consumers who don’t own a vehicle but drive other people’s car on a regular basis. These policies also apply when driving a rental or car-share vehicle.
• Non-owner car insurance is typically less expensive than a standard policy, mainly because it only offers liability. 
• Helps prevent a lapse in coverage which can dramatically raise your rates.  

Cons:

• Non-owner car insurance doesn’t offer comprehensive or collision so you will have to pay to repair the vehicle out of pocket. 
• Many additional coverages that are available with a standard policy are not available with a non-owner such as PIP, medical payments and uninsured or underinsured driver coverage. 
• Non-owner car insurance will not cover your medical bills if you are injured in a car accident. It only offers liability coverage.
• Coverage does not extend to other family members in your household, as it is issued on a per person basis.

How does non-owner car insurance work?

Non-owner car insurance provides liability coverage, which protects a driver in an accident. You can also purchase medical payments (MedPay) protection, personal injury protection (PIP) and underinsured/uninsured motorist protection (UIM/UM).

Although it is optional insurance coverage, it can be helpful for those who drive occasionally or do not have regular access to a vehicle. Non-owner car insurance is secondary coverage and kicks in if the vehicle owner’s primary coverage isn’t enough to pay for the damages.

Suppose you have a car and are satisfied with your current insurer but must file an SR-22 or FR-44 and your present company does not offer it. In that case, you can purchase a separate non-owner policy with another carrier to meet your filing requirements. The extra cost is typically low because the supplemental non-owner policy isn’t covering your car.

Example: Non-owner car insurance

If you have an accident while driving someone else’s car and cause damage worth $30,000 and the car owner’s primary coverage pays for $15,000 of the damage up to the policy’s coverage limits, you would be responsible for the rest.

Can you get non-owner car insurance without a car?

Yes — in fact, you must. You cannot get non-owner car insurance if you have a car. It’s specifically designed for folks who drive but do not own cars. An insurer will require you to meet the following requirements:

• Have a valid driver’s license
• Do not own a vehicle
• Do not have regular access to a car

People also ask

Who needs non-owner car insurance?

Non-owner car insurance is ideal for anyone who doesn’t own a car but has a need for coverage from time to time. 

“Non-owner policies provide liability coverage for accidents, ensuring that the policyholder is protected from potentially significant financial liabilities,” says Tina Willis, owner of Tina Willis Law. “People who should consider this insurance include those who frequently rent cars for travel or business, or often borrow vehicles from friends or family. The coverage is especially useful if they have income or other assets to protect. Non-owners auto insurance can also be useful for people who have sold their car but want to maintain continuous insurance coverage, which can help keep premiums lower in the future.”

Here are a few reasons you may want to consider a non-owner car insurance:

You rent cars on regular basis: If you rent vehicles frequently, a non-owner car insurance policy makes sure you are fully protected in a rental car without having to purchase the liability coverage from the car rental agency which is often more expensive.

You want to prevent a gap in coverage: Insurance companies don’t like to see a gap in your insurance coverage and, in many cases, charge more for a policy if you have a significant gap in your coverage history.

In some cases, the increase can be dramatic. We analyzed the data and found that a lapse in coverage up to 30 days will hike your car insurance rate by an average of 15% a year. A gap of more than 30 days results in a 26% increase a year.

If you are in between cars and don’t want a gap in your coverage history a non-owner policy will keep you current with insurers and ensure you are protected if you rent a vehicle or use a car-sharing service. 

Car-sharing: While most car-sharing services offer insurance, they are often low-limit liability coverages and may not be enough in the event of a major accident. A non-owner policy can protect you at higher coverage levels when using a car-sharing service. 

SR-22: If you have been convicted of a DUI or other major driving offense the state you live in may require you to show proof of insurance via a SR-22 filing. If you don’t own a car or are in the process of getting a new one, a non-owner SR-22 policy will meet those requirements. 

What does car insurance without a car cover?

Coverage under a non-owner insurance policy includes:

• Bodily injury liability: Bodily injury liability coverage pays for medical expenses and legal fees if you are at fault in an accident that injures other people.
• Property damage liability: Property damage liability coverage pays for repairs or replacement costs if you are at fault in an accident that damages someone else’s property.

The state’s minimum liability limits apply to non-owner insurance policies. For example, if drivers are required to carry $10,000 in bodily injury liability and $10,000 in property damage liability, those are the minimum requirements for non-owner insurance policies too. 

Some insurers also offer medical payments and uninsured/underinsured motorist bodily injury coverage. Because a car is not attached to a non-owner policy, you will not be offered the following types of coverage:

• Collision: Collision coverage pays for repairs to your own vehicle if it is damaged in an accident, regardless of who is at fault.
• Comprehensive: Comprehensive coverage pays for damages to your vehicle caused by non-collision events such as theft, vandalism, natural disasters or hitting an animal.
• Rental reimbursement: Rental reimbursement coverage pays for the cost of a rental car while your vehicle is being repaired after a covered accident.
• Towing and labor: Towing and labor coverage pays for the cost of towing your vehicle and certain labor expenses, such as roadside assistance, when your car breaks down.
• Custom parts and equipment coverage: Custom parts and equipment coverage pays for the repair or replacement of aftermarket parts and accessories you’ve added to your vehicle, beyond the standard factory-installed options.

When shouldn’t you buy non-owner auto insurance?

A non-owner personal auto insurance policy isn’t for you if:

• You own a car. In this case, purchase a standard owner’s policy.
• There is a vehicle in your household. You must be listed as a driver on the car owner’s policy. This is especially true if you’re married.
• You drive a car regularly. If you don’t own a car but drive someone else’s vehicle frequently, you should be added to that person’s policy as a driver. 
• You are using a vehicle for business use.
• You don’t have a driver’s license and cannot obtain one within 30 days of starting a non-owner policy.

How much does non-owner car insurance cost?

Non-owner car insurance costs $325 a year, on average, based on a CarInsurance.com rate analysis. However, you may pay more or less depending on your driving record, where you live and other factors.

Non-owner car insurance is cheaper than standard insurance. But the costs vary from company to company. According to Jarrett Dunbar, a spokesman for Nationwide, costs tend to range from 10% to 80% of the price you’d pay for a standard auto policy.

“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.

Non-owner car insurance costs in each state

There can be significant cost differences by state and ZIP code. In the table below, you’ll find the average costs for non-owner car insurance by state:

Who has the cheapest non-owner car insurance?

State Farm and GEICO offer the cheapest non-owner auto insurance among major carriers. USAA also provides some of the cheapest rates, but its products are only available for members of the military, veterans and their families.

In the table below, see how carriers compare when it comes to non-owner insurance rates.

*USAA is only available to military community members and their families.

Before you purchase auto insurance, take the time to compare car insurance rates across multiple auto insurers. That’s the best way to find cheapest rates for your situation.

How do I buy a non-owner car insurance policy?

You apply a non-owner car insurance policy in the same manner as you would for an owner’s policy. Not all auto insurance providers offer non-owner policies because this is considered a non-standard policy.

You can contact local independent agents with access to multiple non-standard carriers or your state’s insurance regulator for consumer information on companies offering non-owner policies.

Suppose you have a non-owner insurance policy and you purchase a vehicle. 

In that case, you must inform your insurer immediately to change your policy to an owner’s policy that will cover your new car – or else you’ll be without coverage.

Calculator: Compare car insurance quotes from 25+ companies

Difference between non-owner insurance and standard car insurance 

The main difference between these two types of policies is the type of coverage they offer as well as the cost. 

In general, a non-owners policy will cost less than a standard policy. The average premium for a non-owner policy is only $325, compared to $1,895 which is the average of a full cost policy. If you are carrying a liability-only standard policy (limits of 50/100/50), the average price is $647. 

It’s not just the cost that is lower, the number of available coverages is also lower. A non-owner policy only offers liability coverage while with standard car insurance you can add collision and comprehensive. 

This means that while a non-owners policy will help pay for property damage as well as medical and legal bills for people that you injure with the car you are driving, it doesn’t offer any protection for the vehicle itself. It also doesn’t cover your own injuries if you are hurt in an accident.

Collision and comprehensive coverage will repair the owner’s vehicle after a collision or other incident such as fire, flood, vandalism or animal strikes. Comprehensive and collision are not available with a non-owner insurance policy.

As you will be driving a variety of cars (rental, friends or car shares) your insurer could not properly price a collision or comprehensive premium.

As comprehensive and collision are not available, if you damage the vehicle you are driving, you may be on the hook for the cost of repairs.

FAQs

Resources & Methodology

Source

Insurance Information Institute “Rental car insurance.” Accessed November 2024. 

Methodology

CarInsurance.com gathered non-owner car insurance rates across all states with the help of Quadrant Information Services. The rates are based on a profile of 40-year-old male and female drivers with good insurance scores and clean driving records.

To evaluate the premiums, we compared 53,409,632 insurance quotes from 170 insurance companies across 34,588 ZIP codes.

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Sarah Sharkey Contributing Researcher

Sarah Sharkey is a personal finance writer with a master’s degree in management from the Hough School of Business at the University of Florida. She enjoys helping readers find money solutions that work. She has written for numerous personal finance publications including Money Under 30 and The College Investor.

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Laura Longero is an insurance expert with more than 15 years of experience educating people about personal finance topics and helping consumers navigate the complexities of auto insurance. She writes and edits for QuinStreet’s CarInsurance.com, Insurance.com and Insure.com. Prior to joining QuinStreet, she worked as a reporter and editor at the USA Today Network. Laura completed the pre-licensing course in Personal Lines Property & Casualty Insurance in Nevada.

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