People who don’t own a car, but still have a drivers license to operate a vehicle may not know that there are insurance policies out there just for them. When people hear the term “non-owners auto insurance,” they tend to ask three major questions—they want to know what it is, why it’s necessary, and who would benefit from having it. Below is a brief overview and answers to those three big questions.
Simply stated, non-owners auto insurance is a type of policy designed for those who do not own cars, but borrow or rent them often and could use the added protection these policies afford. The insured is covered in the event of an accident insofar as liability coverage. This is especially important in the event of a crash that leads to a lawsuit in which the operator of a vehicle has been named. Non-owners auto insurance will cover their liability for injuries, damage to other vehicles, and damage to property. For example, if a person rents a car, has non-owners auto insurance, and accidentally crashes into someone’s yard (causing damage to the property), he or she would be covered in the event of a lawsuit.
Additionally, non-owners insurance policies can include a “loss damage waiver,” which means that if a car that has been borrowed is stolen, the insured is protected from having to cover the costs of the loss. With rental cars, the credit card company will often cover this kind of liability—but it is often a good idea to have it in the case of borrowing someone’s car.
Many people who rent cars think that they shouldn’t need a non-owners car insurance policy because they can just get coverage from the rental car company. This is true, rentals do offer insurance with each vehicle, but it is typically much more expensive than purchasing a personal non-owners policy—some are as much as $150/day. Some independent coverages only have a premium of a few hundred dollars per year, making it a much wiser choice for frequent renters.
Those who borrow cars frequently for use (say from friends or neighbors, for example), would be good friends indeed if they choose to get a non-owners auto insurance policy. Certainly, the owner of the vehicle who has insurance will be covered insofar as their policy allows—but the driver of the car can be subject to legal action from the owner or from their insurance company—so it’s a really good idea to ensure that coverage is complete in case of a personal lawsuit.
Anyone who borrows a car or uses rentals frequently can benefit from having non-owners auto insurance. It’s designed for anyone whom does not own a car, nor has regular access to a vehicle (such as a roommate’s car that they allow to be used).
Non-owners auto insurance makes sense for a variety of people—those who do not own a car, but do rent or borrow cars frequently.