What Is Non-Owner Car Insurance?

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Written by Mandy Sleight Edited by Nick Versaw Reviewed by Amanda Clear

Updated October 19, 2023

If you regularly drive someone else’s vehicle but don’t own one yourself, you might need non-owner car insurance.

Non-owner insurance provides liability coverage if you cause an accident while driving a borrowed, rented, or shared car. This type of policy provides secondary coverage if any damages you cause exceed the vehicle owner’s existing policy limits. But whether you need a non-owner policy depends on the vehicle owner’s policy, their coverage levels, and how frequently you drive their car.

Here’s what you need to know about non-owner car insurance, what it covers, when it makes sense to buy, and where to get this particular coverage.

Key Takeaways:

• Non-owner car insurance makes sense if you frequently borrow, rent, or car-share someone else’s vehicle and want financial protection if you get into an accident.
• If you don’t have a driver’s license, already own an insured car, or are listed as a driver on someone else’s insurance policy, non-owner insurance may not make sense.
• Compared to a traditional auto insurance policy, non-owner coverage is usually more affordable, but it isn’t available from all insurance companies.

What Is Non-Owner Car Insurance?

A non-owner car insurance policy is for if you drive a vehicle that isn’t registered to you. If you drive someone else’s car — whether you borrow your neighbor’s car, rent one from a company like Hertz or Enterprise, or use a car-sharing service — you could be putting yourself at financial risk if you get into an accident.

Non-owner auto insurance provides liability insurance for the other driver’s injuries or property damage you cause in an accident. If you don’t have liability protection through the registered vehicle owner’s personal insurance policy, you exhaust the limits of that policy, or you don’t have a non-owner insurance policy as secondary coverage, you could be responsible for the other party’s medical bills, lost wages, and property damage if you’re found at fault in an accident.

When Non-Owner Car Insurance Makes Sense

Getting non-owner car insurance might be a good idea if you’re in any of the following situations:

You frequently borrow someone else’s car

Suppose you regularly borrow a family member, neighbor, co-worker, or friend’s car. In that case, a non-owner auto insurance policy can protect both your and their financial interests if you get into an accident.

You want more financial protection and peace of mind

When you drive another person’s car, you don’t get to control the type of insurance or coverage levels they buy. A non-owner car insurance policy can provide secondary coverage over and above theirs if the auto accident damages exceed their bodily injury and property damage liability coverage limits.

You rent cars or use car-sharing services

Rental car companies require proof of insurance before renting a car, whether you provide your own policy or purchase temporary coverage. You’ll also need the same for a car-sharing service like Zipcar or Turo. Buying a non-owner car insurance policy may be cheaper and easier if you regularly rent or car-share.

You have a driver’s license but not your own vehicle

Previous insurance history is one of the many factors insurance companies use to determine the cost of auto premiums. And if you have previous lapses in coverage, you may pay more.

Even if you don’t regularly borrow or rent another car, purchasing a non-owner policy can be an affordable way to prevent higher rates when you need to insure your own vehicle in the future.

When non-owner car insurance doesn’t make sense

Non-owner insurance policies aren’t necessary for all drivers and situations. Non-owner auto insurance may not make sense if:

• You own a car and have a standard car insurance policy in place.
• You don’t have a driver’s license and won’t be driving any vehicle.
• Someone in your household owns a vehicle and has a traditional auto insurance policy, and they can list you as an insured driver.

What Does Non-Owner Car Insurance Cover?

Non-owner car insurance covers injuries and property damage for the other driver and their passengers in a collision. For example, if you cause an auto accident in a vehicle you don’t own, a typical non-owner car insurance policy can pay for their:

• Medical expenses
• Lost wages
• Legal fees
• Repair or replacement costs to vehicles or other property you’ve damaged

Besides basic liability coverage, non-owner insurance may also include:

• Medical payments coverage (MedPay) pays for your and your passenger’s injuries, regardless of who’s at fault.
• Personal injury protection (PIP) covers you and your passenger’s medical expenses, lost wages, funeral costs, or home aides.
• Uninsured/underinsured motorist coverage (UI/UM) if the other driver causes the accident but doesn’t have insurance or doesn’t have enough liability coverage. The vehicle owner’s UM coverage would need to be exhausted before a non-owner UM policy kicks in.

These additional coverages can vary by insurance company and state requirements.

What Doesn’t Non-Owner Car Insurance Cover?

Non-owner auto insurance covers you as the driver but not the car you’re driving. The non-owner liability insurance policy doesn’t provide comprehensive or collision coverage for the borrowed vehicle, which pays for the car’s physical damage if you cause an accident. The insurer would have to include these coverages in the car owner’s policy.

A non-owner insurance policy also only pays for your own injuries in an auto accident you cause if your state laws require your insurer to offer MedPay or PIP coverage (and you accept it).

How Much Is Non-Owner Car Insurance?

The average cost of non-owner car insurance depends on a few factors, including your age, ZIP code, driving history, and insurance company. If you’re a high-risk driver or need an SR-22 insurance form, for example, you’ll pay higher rates than a driver with a clean driving record.

Since it isn’t tied to a specific make and model, non-owner auto insurance is usually much cheaper than a standard auto insurance policy. The cheapest non-owner car insurance policy provides liability-only coverage. Additional coverages come with an extra cost.

Where to Buy Non-Owner Car Insurance

You might need to buy non-owner insurance if you don’t have a car but drive other vehicles. Here are a few great options for non-owner insurance policies:

• Liberty Mutual
• GEICO
• Nationwide
• State Farm
• Progressive
• Direct Auto
• Dairyland

Gathering quotes to compare car insurance companies can help you find the best rate for your non-owner coverage needs. An insurance agent can also help ensure you get the right amount of coverage to protect you financially in case you cause an accident.

Non-Owner Insurance FAQs

Non-owner insurance is a good option if you have a valid driver’s license but don’t own a car. We answered some of the most common questions about non-owner coverage to help you choose the right type of policy.

Can I insure a car that’s not in my name?

It’s possible, but only through a non-owner policy that’s added on top of an existing policy in the titled driver’s name. You have to prove “insurable interest” to insure take out your own policy, which usually means your name is on the title.

In some states, like New York, the vehicle’s registration and insurance policy name must match exactly. Most states require the registered owner to have insurance, regardless of who drives the vehicle. But if you drive the car, you can buy a non-owner policy to protect yourself financially in an accident if the liability limits on the vehicle’s primary policy is exhausted after a claim.

Do I need car insurance with no car?

Not necessarily. If you don’t own a car, you don’t need insurance — but having a policy has benefits.

A coverage gap can cause higher rates when you insure a vehicle. A non-owner insurance policy can provide continuous coverage if you borrow or rent someone else’s car to keep future rates lower.

Which states require non-owner car insurance?

No states require non-owner car insurance. However, if you have a severe driving infraction like a DUI or license suspension, your state might require you to file an SR-22 financial responsibility document. A non-owner auto insurance policy can meet the requirement if you don’t own a vehicle.

What should I do if I have non-owner car insurance, and I buy a car?

A non-owner car insurance policy doesn’t cover vehicles you own. If you buy a car and have a non-owner policy, you’ll have to get a standard auto insurance policy listing the newly purchased vehicle in order to drive it. Comparing car insurance quotes can help you find the cheapest rate for a traditional insurance policy since rates vary by company and vehicle make and model.

Sources:

1. Insurance Information Institute, “Rental car insurance,” Accessed October 12, 2023.
2. New York State Department of Motor Vehicles, “New York State Insurance Requirements,” Accessed October 12, 2023.
3. Nevada Department of Insurance, “Named Non-Owner Coverage Endorsement,” Accessed October 12, 2023.

Mandy Sleight Auto Insurance Writer

Mandy Sleight has over 15 years of insurance knowledge and expertise in auto, home, life, health, pet, supplemental benefits, and other insurance products. She is a sought-after insurance expert, appearing in Bankrate.com, Moneygeek.com, U.S. News & World Report, Reviews.com, CNET, and other publications. She uses her background and experience working for well-known insurance companies like State Farm and Nationwide Insurance to create engaging and easy-to-understand content to help readers make smarter insurance choices that have a positive effect on their budgets and finances.