Cars are expensive—even used cars are no longer a cheap option. So it’s not too surprising that folks who live in areas where a car isn’t a total necessity might choose not to own one. Aside from the cost of buying, maintaining, and fueling a car, there’s also the car insurance, which costs anywhere from $53 to $192 per month on average, depending on the coverage you select.
But we live in a car-centric society, and not owning a car doesn’t mean you’ll never need a car. Luckily there are a lot of options when it comes to getting access to a vehicle for a short period of time, ranging from traditional car rentals to car-sharing apps to borrowing your friend’s car in a pinch. And you might assume that when you’re just using a car temporarily you don’t need your own liability insurance—but that’s not always true. Sometimes it’s a very good idea to buy something called Non-Owner Car Insurance.
Non-owner car insurance
Non-owner car insurance is secondary insurance—additional coverage that kicks in after primary insurance hits its limit. When you borrow or rent a car owned by someone else, their insurance covers the car even if you’re not officially listed on the policy. So why would you need your own policy? Because of liability: If you’re in an accident while driving someone else’s car and the damages exceed the base policy’s limits—or if the base policy denies the claim altogether—you’ll be on the hook for the extra costs.
Let’s say you borrow your friend’s car and their liability insurance has a $20,000 cap on bodily injury. You get into an accident and the other driver suffers $30,000 in medical bills as a result. If you don’t have any extra insurance, your friend’s insurance will pay out the $20,000—and you will have to come up with the rest. Considering the average cost of “evident” injury in a motor vehicle accident is $42,000 and “disabling” injuries can run to $162,000, it’s easy to see how getting into an accident without your own insurance can be problematic.
Like regular car insurance, non-owner car insurance starts off with basic liability and often includes the option to add on coverage for personal injury, medical payments, or uninsured motorist coverage. You’ll want to check with your insurer to make sure you know exactly what your policy covers.
Aside from the financial risk of driving any vehicle, there’s one other big reason you might consider non-owner car insurance if you borrow or rent cars regularly: your rates. If you’re temporarily without your own vehicle, buying non-owner car insurance can help keep your rates steady. If you go without car insurance for more than 31 days, your rates can jump up to 35%. Non-owner car insurance keeps your coverage current, which can pay off if you plan to own your own vehicle again soon.
Who needs it?
Just because you don’t currently own a car and occasionally have to borrow or rent one doesn’t mean you need non-owner car insurance. Here’s a guide to who needs it and who doesn’t:
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Frequent rent or share. If you’re renting cars or using a car-sharing platform several times a month, you should probably carry non-owner insurance. If you rent a car once or twice a year when traveling or for a special need, it’s probably not necessary.
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Occasional borrowing. If you borrow your friend’s car constantly, they should probably list you on their insurance as a driver, which means you don’t need non-owner insurance. If you borrow different cars from different people on a regular basis, however, you should probably get your own coverage as your use probably doesn’t qualify you as a listed driver.
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Company car. If you drive a company car, check the terms of its insurance. Not all company cars are covered for personal use. If you’re driving the company-owned car on the weekends or when doing your weekly errands, you might need non-owner insurance to protect yourself in case of an accident.
