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Driving a Car that You Don't Own? Non-Owners Insurance May Be Right For You



What are my Risks When Using Car-Sharing Service?

It may come as a surprise that even if you do not own a vehicle, you still may need a car insurance policy. If you regularly drive a car that you don’t own, such as a short-term rental (think Zipcar, Turo) or borrow friends’ cars and cause an accident, you could be on the hook for huge out-of-pocket expenses.


Car-Sharing is Booming

Car sharing is a type of car rental that allows you to rent a car at any hour. It is more convenient for those who need a car for a shorter period of time. You are only billed for the usage (how far you have traveled). Car sharing is booming with 6 million users currently and almost $3 billion in revenue. As cars become more expensive and less affordable for urban people, utilization of car sharing is projected to steadily increase over the next five years.


What are my Risks While Driving a Non-Owned Car?

Many people using a car-sharing service or borrowing a car never give their personal liability a second thought. They may have the mistaken belief that if they cause an accident, the car owner’s insurance will cover the expenses. That’s an unwise assumption. If you fit into any of the following categories, you’re at risk and should consider a non-owner’s policy:


Frequent Renting or Car-Sharing

If you find yourself frequently renting or using car-sharing companies or apps (think Zipcar or Turo) a non-owner’s policy may be beneficial. A non-owner’s insurance policy will extend to any cars rented and provide coverage beyond that of the rental company or the car-sharing app, which usually only provide the minimum level of coverage required. Additional liability insurance through a rental company can be costly and a non-owner’s policy may be a more affordable solution for better coverage.


Frequent Borrowing

If you are borrowing a car from a friend or relative, the owner’s insurance policy may provide coverage, but the extent of the coverage depends on the owner’s policy. It may be worth investing in a non-owner’s policy to better protect yourself in the event of an accident.


New Drivers or Drivers Reinstating a Suspended License.

Additionally, you may be required by the state to obtain a non-owner’s insurance if you are a new driver who is just getting your license later in life or if you are reinstating your license after a suspension. If the state deems you a “high-risk driver,” you will be required to carry the minimum amount of car insurance required by the state before obtaining your license. If you don’t own a vehicle, a non-owner’s policy will meet the state requirements at a reasonable cost.


Temporarily Between Cars.

Finally, if you find yourself temporarily without a vehicle, a non-owner’s insurance policy can shield you from the fees that are associated with a lapse in coverage. Some companies see a lapse in coverage as a red flag and will charge higher rates when you purchase a new owner’s policy. Not only will a non-owner’s policy protect you against the higher rates, but it will also provide coverage when you’re test-driving vehicles to find your new car.


What is Non-Owner’s Insurance?

A non-owner’s insurance policy is cheaper than a traditional auto insurance policy but typically doesn’t cover damages to the vehicle you are driving or to your own injuries which may occur during an accident. However, policies generally provide liability coverage for personal injuries and property damages to others in the event of an accident. In other words, if you’re at fault for an accident while driving in a car you don’t own, the policy can cover the damages to other drivers that you would otherwise be liable for. Depending on the coverage selected, the policy may also include uninsured or underinsured motorist protection, which can cover injuries caused by a driver without any or enough liability insurance.


I think I need a Non-Owner’s Insurance Policy, what do I do now?

If you think a non-owner’s insurance policy may be right for you, you should get a quote from several insurance companies to find which policy, and price, is right for you. Most insurers don’t offer quotes for non-owner’s policies online, which means you may have to call a company or agent to assist you. Be sure to take your time to find a policy that fits your needs to better protect yourself in the event of a car accident.


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