Non-Owners Auto Insurance - What Drivers Need to Know
To many people, car insurance is a comprehensive term that simply refers to insurance for any type of car. You may be surprised to learn that this is not necessarily true. In fact, standard automobile insurance has several limitations that cause drivers to obtain other products to ensure that they and other drivers are covered adequately. For drivers who do not own a vehicle, non-owners auto insurance is often a necessity.
What is Non-Owner's Insurance?
It is not unusual for drivers borrowing someone else's car to try to purchase an insurance policy for that vehicle. The trouble is, you cannot place insurance on something that does not belong to you. If, for whatever reason, the driver cannot be listed on the owner's insurance policy, how can a driver in this circumstance get insurance?
The answer is simple: he or she needs a non-owner's insurance policy. In doing so, it is possible to make sure that coverage exists while he or she drives any vehicle. Now, it is important to note that non-owner's insurance policies only provide liability coverage, not comprehensive and collision coverage. For these coverage options to exist, it is necessary for the vehicle's owner to carry them on their personal automobile insurance policy.
How it Differs From Standard Car Insurance
When purchasing a standard auto insurance policy, there are a variety of coverage options and levels that make it possible to completely customize the policy to one's liking. However, non-owner's policies are much less flexible and do not allow for customization, offering only liability coverage and sometimes medical or uninsured motorist coverage. Why? Essentially, this product only insures the driver of the vehicle against harm they may cause to other drivers or property, and operates under the assumption that the vehicle's owner claims responsibility for any damage that may occur to the vehicle itself while on loan.
Who is it For?
Although this product is designed for individuals who do not own a car, it is not ideal for everyone. Let's take a look at who can and who cannot benefit from this type of policy.
When Non-Owner's Insurance is a Good Fit
- If you often borrow a friend's car, but do not live with them, a non-owner's policy may be right for you.
- Individuals who normally drive a company vehicle and often rent cars for personal use may need a non-owner's policy.
- For drivers who are in-between cars and do not want to have a lapse in coverage until they buy their next vehicle, non-owner's insurance may be necessary.
- Drivers who have been charged with a DUI and need a liability policy in order to get their license reinstated may be required to purchase non-owner's insurance. However, it may be necessary to pay an additional fee for an SR-22 filing on the policy.
- Some "tote the note" car dealerships require their customers to carry non-owner's insurance until the car's balance has been paid in full.
- Drivers who use car-sharing services will find non-owner's insurance to be an excellent supplement to the liability coverage provided by the car-sharing service.
- If you do not currently have auto insurance and need to rent a car for vacation, the car rental agency will probably require you to purchase short-term non-owner's auto insurance.
Signs Non-Owner's Insurance Does Not Apply
- Teenagers living at home often drive their parents' cars until they get their own or move away. However, they should be covered under their parents' policy, so non-owner's insurance is inapplicable.
- Although you may find that liability insurance provided under a non-owner's policy is cheaper than what is provided under a standard auto insurance policy, you cannot purchase a non-owner's policy when you own your vehicle.
- If you have a spare car you loan to a friend or family member, you need to cover that vehicle with a standard auto policy; you cannot purchase a non-owner's policy for the person borrowing the car.
- Drivers who have had their license suspended or revoked and are not eligible for reinstatement after obtaining auto insurance should not buy non-owner's insurance as it is still illegal for them to drive without an active license.
Where to Buy Non-Owners Insurance
Unfortunately, not all major insurance carriers offer non-owner's insurance to their policyholders. So, if you need this type of policy, it may be necessary to go to a local independent agent, an indemnity company (an insurer that specializes in coverage for high-risk property and individuals), or shop online. Although your current insurance company may not offer this coverage, do not be afraid to ask your agent for a referral to another agency or company that does. Agents know that helping you find coverage they cannot provide right now will make you more likely to return as a customer when you meet their company's criteria for insurability again.
For each insurable need discovered by the insurance industry, there is often a product that is created to fill that gap. Non-owner's insurance is one of those products. Despite the fact many people will never need this type of policy, it is an excellent option for countless others who would not be able to get coverage otherwise. For that reason, non-owner's insurance should be considered a vital product in the car insurance industry.