A non-owners auto insurance policy offers important but limited coverage to a named insured who does not own or lease a vehicle. It is specifically written for someone who does not own a private passenger or commercial automobile, but who desires and would otherwise qualify for an auto policy. Non-owners car insurance is typically needed by:
- drivers who are required to buy a liability policy to keep their driver’s license
- drivers who don’t own a car themselves but who occasionally drive someone else’s car with their express or implied permission
- an individual who doesn’t have a vehicle or intend to drive but is interested in keeping continuous coverage
- an employee who does not own a car but drives a company provided car at work and is required to have a personal policy, even though the employer’s business coverage will be primary and business use may be excluded from the employee’s policy.
Non-owners policies usually cost a lot less than an owners policy because the risk for an insurance company is lower than that of a car owner who drives on a daily basis. The premium amount is, however, dependent upon normal rating factors such as the driver;s record and experience. Two of the more common scenarios in which an individual may benefit from non-owners policies are as follows:
BORROWING A CAR – If you don’t own a car but occasionally borrow a car from a friend the non- owners policy may be a fit. Covered damages that are incurred while driving a borrowed car will typically be subject to primary coverage through the auto policy of the vehicle owner and the policy for a non-owner will provide excess or supplemental insurance. If the owner of the vehicle does not have insurance on the vehicle the non-owners coverage will provide primary coverage. Insurance companies will not issue a non-owners policy for a driver who uses a car owned by or available for regular use by either the policyholder or a member of the household. Non-owners insurance generally covers liability only which protects the policyholder up to the policy limits if they are at fault for injuries and property damage to others. These policies typically do not include comprehensive, collision, and rental coverage.
SR22 – A non-owners insurance policy may be a good fit for people who need an SR22 filing to reinstate their suspended or revoked license and prove that they have met the state insurance financial responsibility requirements. They may not be able to get an owners insurance policy if they don’t own a vehicle and therefore cannot get their license reinstated since they don’t have insurance. Non-owners policies will normally resolve this dilemma since it will satisfy the financial responsibility requirements of the state and enable the insured to obtain an SR-22.
It is important to remember that a non-owners policy provides very limited coverage and only covers the named insured when that person is driving an automobile that is not available for regular use and in which the insured has no ownership interest. Any coverage afforded is for the named insured and does not include or extend to any other person, including family members.