Most of the drivers are more interested in conventional car insurance policies covering their cars. Nevertheless, there is an alternative that is less commonly known as non-owner car insurance, and it is gaining popularity among those drivers who do not own a car yet would like to remain insured.
However, is the non-owner car insurance worth? In this paper, we are going to go deep into the concept, advantages, drawbacks, and practical use of the non-owner car insurance to drivers of the US with the aim of making an informed choice.
What is Non owner car Insurance?
Non-owner car insurance refers to a form of liability that is provided to persons who often drive cars that are not theirs. In comparison to regular auto insurance policy, which is designed to provide liability on an owner of a car, non-owner car insurance is designed to be the source of liability when you drive a car belonging to someone. It typically includes:
- Bodily injury liability: Liability over bodily injury that you inflict on others.
- Property damage liability: This is a liability that covers the damage that you cause to other people and their property.
- In some states, this is sometimes known as personal injury protection (PIP) or medical payments coverage.
More importantly this coverage is not physical damage to the vehicle you are driving, it is just liability.
The Question of Who Needs Non Owner Car Insurance?
The non-owner car insurance suits best in various types of drivers:
- Regular users of the rental cars: These are people who hire cars frequently, but not owning a car.
- Infrequent drivers: People who obtain cars that belong to relatives or friends.
- Suspended or revoked drivers: In certain states, drivers are supposed to have insurance evidence even when they do not own a vehicle.
- Young adults or urban residents: These are individuals who use rideshares or rentals or borrowed vehicles rather than owning a car.
This insurance is beneficial to the drivers to have insurance evidence and liability coverage without the expense of having full auto insurance cover.
Positive Attributes of Non Owner Car Insurance
1. Price-effective Liability Insurance
The non-owner policies tend to be a little cheaper than the full auto insurance due to the absence of physical damages. This is a cost-efficient method of ensuring that drivers who are not car owners will have the necessary minimum liability required by state laws, and are safeguarded accordingly in the event that they are in an accident.
2. Meets State Insurance Requirement
Lots of states also demand that drivers have liability insurance in order to legally drive. Non-owner insurance meets this requirement of individuals without a personal car, which avoids fines and license suspension among other punishment.
3. Protects Your Finances
In case the accident is your fault and you do not have insurance, you might be personally liable to pay medical expenses, property damages and legal expenses. Non-owner insurance protects you against these financial costs at amounts up to your policy limits.
4. Coverage in Renting cars
Insurance services in rental car firms are usually charged at a high price. Liability coverage under non-owner insurance can protect the rental cars, therefore sparing you some money and unnecessary cover.
Drawbacks of Non Owner Car Insurance
Although non-owner insurance is an excellent insurance, it has certain limitations:
1. No Protection over the Car you Drive
There is no coverage of damages to the car you are driving regardless of whether it is a rental car or a borrowed one in non-owner policies. In case you want collision cover or full cover, you will be forced to depend on the insurance of the owner of the car or buy some extra cover rental cover.
2. Limited Eligibility
You can not normally have a car registered under your name and have a non-owner policy. When you have an automobile, you have to have a typical automobile insurance cover.
3. Not Accepted by Rental Companies all the time
Certain renting companies might insist that you buy their insurance or give them evidence of full coverage other than liability. Never assume that your non owner insurance would be sufficient unless you check their policy.
4. May Not Be Another Policy
Non-owner insurance covers the insured driver only named. It might not cover it to other drivers or commercial use of vehicles.
Factors of Cost and Standard Pricing
Non-owner car insurance costs differ depending on such factors as:
- Your car history: Clean records result in reduced premiums.
- Location: Cities that have a high rate of accidents might be expensive.
- Limitations on coverage: The more coverage one has, the more he or she pays.
- Age and credit score: Drivers that are younger and with low credit score might pay higher.
The average cost of non-owner car insurance policies is between 200 and 500 dollars per year, which is very affordable compared to the full coverage policies that cost more than 1000 dollars per year on average.
Should Non owner car insurance be worth it?
Scenario 1: You Rent Cars on a regular basis
In case you rent cars frequently (several times a year) and need a consistent liability coverage, non-owner insurance may give you one without having to purchase insurance with the car rental companies on a per-rental basis. It may result in a significant saving and tranquillity.
Scenario 2: You Borrowing Cars Often
In case you are used to borrowing cars out of your friends or family members, non-owner insurance will save you in case of an accident, even when the owner insurance is not comprehensive.
Scenario 3: You prefer to have a continuous insurance cover
You should not drive without insurance since you may be in between cars or you have a suspended license but wish to drive soon, the non-owner insurance will keep your insurance history and satisfy state regulations, which will assist you in avoiding any legal hassles.
Under What Circumstances is Might Non Owner Car Insurance Not the Right Choice?
- A standard auto insurance policy will be better suited, in case you have a car or are going to purchase one in the nearest future.
- In case you desire to have a cover on the damages caused to cars you drive e.g. collision cover or comprehensive, then you will not be covered by non-owner insurance.
- In case you do not use your car too often, it can happen to be more cost-efficient to just purchase insurance upon renting or borrowing cars.
On-the-job example Case Study
Take the example of Jane who is a 32 years old urban professional who does not own a car, but rent cars approximately 4-5 times a year to go on weekends. She too sometimes steals the car belonging to her brother. Jane bought a car insurance policy with a non-owner car insurance coverage with bodily injury liability of 100,000 /300,000 and property damage liability of 50,000.
In the case when Jane caused a minor accident driving a rental, her non-owner insurance had taken care of the liability part and saved her money and relations with the rental companies. The policy cost was approximately 300 dollars a year, which was not too expensive compared to the daily rental insurance cost that she was paying.
Professional Ralph on Non Owner Car Insurance
Non-owner policies are also highlighted by insurance experts as an intelligent option with certain types of drivers but discouraged when it comes to using non-owner policies as a complete substitute. Information Institute (III) describes non-owner insurance as a niche product, which suits the requirements of drivers that do not own a vehicle and have to settle state insurance demands (source).
FAQs
1. Is it possible to have non-owner car insurance even when owning a car?
No. Non-owner car insurance should be offered to drivers who do not have a registered car that is under their ownership.
2. Is the damage to rental cars covered under non-owner insurance?
No. It normally only includes liability. Rental company insurance or cover of the vehicle owner is required to cover the damage.
3. Does it accept non-owner insurance all over the country?
Non-owner insurance is accepted by most states to fulfill minimum liability requirements but state-specific laws are always checked.
4. What is the non-owner car insurance price?
Depending on your profile and your coverage limits, the policies are around between 200 to 500 per year.
5. Is Rental car insurance superior to non-owner insurance?
It depends. Non-owner insurance is less expensive when used frequently but rental car insurance is likely to offer a wider scope of cover. Compare options carefully.
Conclusion
Non-owner car insurance is typically worthwhile to US drivers that do not own their own vehicles but commute using other means. It provides low cost liability insurance, is legally required and would protect you in case of accidents. It however, does not replace the full auto insurance in case you have a car or desire to be fully covered.
Evaluate your driving habits, state laws and your insurance requirements before making a purchase. The knowledge of the specifics of non-owner insurance will enable you to select care that meets your lifestyle and financial needs and protect your financial well-being.