A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products, including home, life, auto, and commercial, and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, mainly in the insuranc...

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Reviewed by Leslie Kasperowicz
Farmers Insurance CSR 4 Years

UPDATED: Oct 14, 2021

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Here's what you need to know...

  • If you would like to buy a standard personal auto insurance policy, you would need to be the registered owner of a vehicle or have an insurable interest in a vehicle
  • Drivers who frequently borrow vehicles or who often rent can benefit from buying a specialty auto insurance plan
  • Specialty insurance that provides coverage to drivers who don’t own the vehicles that they operate are called non-owner auto insurance policies
  • Non-owner auto insurance provides liability coverage but does not provide physical damage coverage to the vehicle being operated
  • If you are required to provide an SR-22 to the Department of Motor Vehicles but you don’t own a car, a non-owners policy is ideal

The idea of buying auto insurance when you don’t actually own an automobile might sound funny, but in many scenarios it’s necessary. If you don’t own your own car, it doesn’t mean that you aren’t legally allowed to use your driver license and operate a friend’s car or a rental. In fact, failing to purchase personal auto insurance can put you, your family, your wages and your assets at risk. If you would like to learn about insurance for non-owned cars and when it’s necessary to buy it, read on and find out everything that you need to know.

Start comparing car insurance rates now by using our FREE tool above!

If you would like to learn about insurance for non-owned cars and when it’s necessary to buy it, read on and find out everything that you need to know.

Scenarios Where Drivers Who Don’t Own Cars Need Car Insurance

Legally speaking, you are only required to buy auto insurance on a vehicle when you are the registered owner or you are under a lease contract. Since state officials only set requirements for owners to insurance vehicles, it’s often assumed that only owners have a need for coverage. That isn’t always the case in the complicated world of auto insurance claims. There are many common and even some unique scenarios where drivers who don’t have their own car still should carry insurance. Here are the common scenarios you may have already experienced in the recent past:

  • You frequently borrow your friends’ cars but don’t live in the same household
  • You visit out-of-town family members and drive their vehicles while away
  • You use a car-sharing service and need coverage to satisfy terms and conditions
  • You go on business often and drive a business car for pleasure and business use
  • You rent vehicles on a regular basis
  • You must file an SR-22

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What type of policy can you buy without a car?

You can’t buy standard insurance in the scenarios above, but you can buy a specialty insurance policy that’s called a non-owner car insurance policy. A non-owner policy, which is only available through some providers, is designed to help people protect themselves when they’re not required to buy insurance but when they need it. It is for people who are driving cars with an active license but who don’t own the car or their own auto liability protection.

When are you not a good candidate for a non-owners policy?

Not everyone’s a candidate for non-owners insurance. Before you assume that it could save you money to buy specialty coverage, you should be sure you have a deep understanding on who the coverage is for and who it isn’t for. Here are some scenarios where you shouldn’t apply for non-owner auto insurance:

  • You own a vehicle and want coverage to drive that vehicle
  • You are borrowing a car of someone who lives in the same household
  • You have regular access to the car that you’re driving
  • You don’t have a valid driver license number

Why do you need insurance when you don’t own a car?

If you are facing a scenario where you need coverage and you’re a good candidate who qualifies, you might still question why it’s necessary to buy insurance. You might not get in trouble with law enforcement if you’re pulled over, but that doesn’t mean that you can’t get into financial trouble for being uninsured. Failing to think 2 steps ahead could result in financial devastation.

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What can happen if you’re in an accident without insurance?

It is your best interest that you buy accident protection that protects both your assets and your wages in the event that a victim takes you to civil court. While it’s common for victims in an accident to sue the vehicle owner, the victim also has the right to go after the driver if they weren’t covered under the policy.

Without your own coverage, you could face wage garnishments or even asset liquidation just because you didn’t have liability insurance that was available to pay for injuries and damages.

Having non-owner insurance takes the burden off of your shoulders and transfers that burden to the insurer.

What types of coverage is included in a non-owners policy?

Not all of the traditional coverage options are available when you’re buying a non-owner policy. Since you don’t have an insurable interest in the car, you can’t buy physical damage coverage on that car. You can, however, buy third-party liability coverage to protect your own financial interests. Here are the coverage options you can select from on a nonowner’s policy:

  • Bodily Injury
  • Property Damage
  • Uninsured Motorist
  • Medical Payments

Is it cheaper to get non-owner insurance or rental car insurance?

If you’re renting, you might think that buying liability protection through the agency is the best idea. That’s not always the case when you consider price. Since the average cost of liability coverage through the rental company is $14 per day, it could be more cost effective to carry your own liability coverage. Just remember that you should still purchase the damage waiver to protect the car.

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Carrying Non-Owner Insurance Can Help Your Future Rates

Carrying insurance can save you down the line when you buy a car of your own. Since you’ll have existing insurance, you’ll get experience credits and prior insurance discounts that can dramatically lower your rates.

If you don’t have any type of coverage at the moment, it’s time to price the cost of non-owner policies. You can use an online auto rate comparison tool to see firsthand how affordable it can be. Once you compare the instant quotes from each carrier in the marketplace, you can make an informed decision and buy protection that’s necessary to get peace of mind behind-the-wheel. Compare car insurance rates now by entering your zip code in our FREE tool below!