Should I purchase a policy if I don’t own a car?

woman purchasing non-owner car insurance

More and more offices are allowing employees to work from home, which means no more commuting to and from the office every day. Because of this, many folks have decided to ditch their cars in favor of public transportation or ride-sharing services. But did you know that even if you don’t own a car, you may still need insurance? It’s called non-owner car insurance and makes sense for certain people. Read on to make sure you have the coverage you need.

What is non-owner car insurance?

Non-owner car insurance is a type of liability insurance for people who don’t own a car but may need auto insurance. It covers bodily injury and property damage claims if you’re liable in an auto accident. Unlike a regular auto insurance policy that’s assigned to a specific vehicle, a non-owner car insurance policy typically doesn’t offer comprehensive or collision coverage. Therefore, it won’t cover damage to the car you’re driving or medical bills if you’re involved in an accident.

Non-owner car insurance is purchased on a per-person basis and will not cover a spouse, teen driver, or anyone else on the policy. Typically, a non-owner policy doesn’t have a deductible, so that means no out-of-pocket expense before your coverage begins. This is because non-owner insurance is secondary coverage, used only if the primary car owner’s coverage isn’t enough to cover all the damages.

How does it work?

Each state has different requirements that non-owner car insurance must meet the minimum of. You can choose more coverage if you’d like, but if you choose to stick with the basics, here’s what that covers:

  • Liability insurance: covers the damage you cause if you’re at fault in an accident
  • Non-owner uninsured motorist coverage: covers you if you’re in an accident with a driver who is uninsured
  • Medical coverage/personal injury protection: covers medical expenses for you and your passengers if you’re in an accident

A liability format

Non-owner car insurance covers damages the same way that liability insurance does. It pays for the damages you may cause another driver’s vehicle in the event of an accident, but it doesn’t cover your own damages. The Zebra breaks down how this coverage works:

Limit Coverage Description
50/ $50,000 in bodily injury liability coverage per person
100/ $100,000 in bodily injury coverage per incident
50 $50,000 in property damage liability per incident

Who needs non-owner car insurance?

Depending on the state you live in, you may be required to have insurance if you operate any vehicle. In general, these are some reasons you should consider purchasing non-owner insurance:

  • You need an SR-22 but don’t own a car
  • You occasionally drive other people’s vehicles but don’t own a car
  • You’re between vehicles but plan on purchasing another vehicle soon
  • You use rental car services
  • You use car-sharing services
  • You don’t own a vehicle but want to avoid a lapse in car insurance coverage

Who SHOULDN’T get non-owner car insurance?

Surprisingly, there are some circumstances in which you may drive, but you aren’t a good candidate for non-owner car insurance:

  • You have your own vehicle
  • You frequently borrow the car of a spouse or someone you live with
  • You rarely borrow someone’s car and mostly use public transportation, or you frequently use a ride service like Lyft or Uber
  • You use a company car that is insured by the company

How much does it cost?

Typically, non-owner car insurance costs between $200-$500 per year. That’s 5 to 15 percent less than a standard policy, because it offers less coverage to drivers who are not on the road as frequently as those who own a car. However, there are several factors that affect how much non-owner insurance will cost you:

  • Your coverage limits: how much or how little coverage you choose will affect the price
  • Your driving history: just like with traditional insurance, lots of tickets or accidents can cause the price on non-owner car insurance to rise
  • Where you live: depending on the coverage that your state mandates your policy price may be affected
  • How often you expect to drive: if you are planning on renting a car and commuting to work every day, you may need more coverage than someone who will only be driving occasionally

Do you need good credit?

Insurance companies do look at your credit score, regardless of what kind of insurance you’re trying to purchase. However, it may not be the traditional credit score you’re thinking of. Most companies use something called a credit-based insurance score to set your rate. This score can predict how likely you are to file a claim, but it’s not used in every state. In California, Hawaii, and Massachusetts, it is against the law for companies to use a credit-based insurance score to determine your rate, and in Michigan no type of credit score can be used to determine rates.

Elephant insurance offers non-owner car insurance

If you think you’re a good candidate for non-owner insurance, contact us today. We can let you know for sure if you require non-owner car insurance, what your rate will be, and the amount of coverage that will best protect you. Car insurance is confusing, but we’re here to help. Get a quote today and let us help you get the car insurance coverage you need!

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