Non-Owner Car Insurance

Understanding non-owner car insurance

The primary benefit of a non-owner policy is to limit one's extent of liability while on the road. If you were to borrow a friend’s car and cause an accident, your friend’s auto insurance policy should cover most of the damages incurred. However, if the damages exceed your friend's liability coverage, you may be personally responsible for the remaining balance. A non-owners policy comes in handy to limit liability in such situations.

• Non-owner car insurance for high-risk drivers

Non-owner car insurance is also useful for high-risk drivers. If you have a DUI, speeding tickets, and other violations on your driving record, you may have a challenging time receiving regular policy coverage. A non-owners’ policy provides timely and reliable liability coverage for high-risk drivers who don’t currently own a vehicle.

Furthermore, a non-owner policy allows high-risk drivers (who don’t currently own a vehicle) to have their licenses reinstated. This is because when you’re applying to reinstate your license, you must demonstrate proof of continuous insurance coverage. A non-owner policy allows you to prove to the DMV that you currently have coverage for minimum liability.

What is covered in non-owner insurance?

The most basic coverage for a non-owner policy will apply to third-party injuries and property damages (which you may have caused during an accident). However, there are other coverage options that you may add to a non-owners car insurance policy (all applying to liability damages). These include:

• Personal injury protection
• Medical payments coverage
• Coverage for accidents involving an underinsured/non-insured motorist
• Rental car liability insurance

By having control over your extent of liability, you can protect yourself from incurring hefty bills after causing an accident. For example, if you were at fault for a recent accident while driving someone else's car, the victims may sue you for damages and even come after your assets. Drivers in the past have lost their properties (such as homes) as a result of being liable after an accident.

However, a non-owners insurance policy doesn’t offer comprehensive coverage for the car that you’re driving. This is because the policy isn’t tied to any specific vehicle, which makes it harder for insurers to calculate the extent of liability.

For high-risk drivers, having liability coverage is of utmost importance. This is because you may not have the benefit of doubt after an accident, and the vehicle owner’s insurance company may hesitate to cover an accident that you caused. Having a non-owners policy will limit your extent of liability in such situations.

Who should get a non-owner car insurance policy?

The big question that motorists ask themselves is whether they need a non-owners policy. Indeed, this type of coverage is not for everyone. You should be aware of when you actually need it so as to save on paying additional premiums.

Here are 4 situations where you should obtain a non-owners policy.

• If you rent vehicles often
• If you regularly borrow a friend’s car
• If you temporarily don’t own a vehicle but wish to maintain liability coverage

Non-owner car insurance is not for drivers who own a vehicle or who live with someone that does. If you regularly drive a car that is owned by someone within your household, you should be listed on the policy of that vehicle owner.

Filing an SR-22 for license reinstatement

As previously mentioned, a non-owners policy comes in handy for high-risk drivers who may need their licenses reinstated. For example, if you’ve been convicted of a DUI or another serious traffic offence, your license may have been suspended. A common condition for having it reinstated is by filing for SR-22 insurance.

The DMV may want to ascertain that you're maintaining continuous insurance coverage, mainly because they view you as a higher risk driver. If you own a vehicle, your insurance company will file the SR-22 as part of your regular policy.

However, those who don’t own a vehicle may need to obtain a non-owners insurance policy specifically for license purposes. This is the only path towards a successful SR-22 filing and ultimately having your license reinstated.