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 19, 2021

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Here's what you need to know...

  • A standard Personal Auto Policy is a contract that covers you while you drive a vehicle that you have an insurable interest in
  • Standard policies will also provide liability coverage while you drive non-owned vehicles or vehicles that you’re renting
  • If you don’t own your own vehicle or have a financial interest in one, you should still seek protection when you’re driving non-owned cars
  • Licensed drivers who borrow vehicles or who rent vehicles regularly should purchase a non-owners car insurance policy
  • Non-owners insurance doesn’t cover you to drive any vehicle. Vehicles you own or have regular access to are excluded.
  • A non-owners policy provides liability coverage but doesn’t pay to coverage any physical damage to the vehicle that you’re borrowing or renting

You don’t have to own a vehicle to drive one. In fact, statistics show that more and more millennials are making the decision to live a car-less life. According to the most recent data collected by the University of Michigan, about 9.22 percent of households in the United States didn’t own a car in 2012. This number has grown to between 31.4 percent and 56.5 percent in cities like San Francisco, Boston and New York where there is easy access to alternate transportation. Enter your zip code in our FREE tool below to start comparing car insurance rates now!

Just because the country’s reliance on cars isn’t as great as it once was doesn’t mean that the need for car insurance is going anywhere. Even though an adult makes the decision cut their reliance on cars doesn’t mean they won’t ever apply for a license or get behind the wheel. In fact, many adults without a car still hold their license. These licensed drivers have a major need for car insurance that will protect them in the moments where they drive but standard coverage won’t cut it.

Why can’t someone who doesn’t own a car buy standard insurance?

There are conditions that must be met before you’re considered eligible for a standard Personal Auto Policy.

Under the policy form, it specifically says that the insured vehicle that’s listed on the policy must be owned by you.

If you don’t hold the title and you’re not financing or leasing the car, you’re not at risk of having a financial loss. Therefore, you won’t be eligible to buy standard insurance because an owned auto must always be listed.

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Why would you need insurance if you don’t own a car?

It’s reasonable to wonder why you would want to pay insurance premiums when you don’t have a car to insure. Before you completely reject the idea, you have to really contemplate what you have to lose. If you ever drive a car, even if it’s only for a few minutes at a time, you’re at-risk of having an uncovered loss. Covering your bills alone can be difficult and then you need to factor in the cost of third-party damages.

We live in a very litigious society where individuals have the right to sue whether or not their claims are founded. This is why it’s important to protect your wages, property, and assets. When you buy your own specialty insurance, you’ll have peace of mind in knowing that the insurer will help pay for the third-party damages and court costs if it goes that far.

If you don’t have assets do you need insurance?

Just because you don’t have assets doesn’t mean having an uninsured loss can’t hurt you. Vehicles are two-ton weapons that can do major damage and cause major injuries if they aren’t driven responsibly. Having insurance will guarantee that you can help victims in an accident that you caused recover.

Insurance guarantees that you have a company by your side to help fight for you and pay for court costs if the claims made are unfounded.

Without insurance, you’d be left paying court costs out-of-pocket. Auto policies pay for these court costs separate from your liability limits. This is referred to as a supplementary payment in the insurance world. You’d also face wage garnishment to pay for damages you can’t pay for with your assets. This is an order that could affect you for years.

How can you buy a specialty plan to cover you driving non-owned vehicles?

You aren’t eligible for a standard auto insurance policy, but you might be eligible for a specialty plan. Specialty plans for drivers who don’t own vehicles are called non-owners policies. A non-owners auto policy provides coverage to people who are renting a car, borrowing a car, or part of a car-sharing program. You aren’t eligible for this coverage if you own or co-own a car of any kind.

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What type of coverage does a non-owners policy provide?

Non-owners insurance doesn’t provide the same level of protection as a standard policy. The policy itself will provide liability coverage but not physical damage coverage. This is because you won’t have a financial interest in the cars that you’re driving. In some cases you may be allowed to add Uninsured Motorist Protection and Medical Payments to your policy to cover your medical bills.

Are you covered driving any vehicle?

You can’t drive any car and expect to be extended coverage. For your policy to pay, you must be driving a vehicle that you don’t own and that you don’t regularly drive. The car must have a valid registration and it must fall under the private passenger classification. If these conditions aren’t met, you won’t have coverage for a liability claim.

Who needs non-owners insurance the most?

If you have a license but you never drive, you won’t necessarily need a policy. The only time you’re at-risk is when you operate a vehicle. Here are scenarios where having specialty liability coverage is recommended:

  • You frequently rent cars
  • You borrow cars you don’t always have access to
  • You want to keep your preferred driver status
  • You want to keep your continuous insurance discount
  • You want multi-line discounts
  • You’re required to have liability insurance to satisfy an SR-22 requirement

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How much does non-owners insurance cost?

There’s not a flat rate for non-owners insurance. Like standard policies, the rates are based on how likely you are to have a loss. The company will look at your age, your driving history, your claims history and your driving habits before calculating a premium.

In general, the rates are much lower than rates for a standard plan.

If you’re shopping for liability coverage to protect you in cars you don’t own, it’s time to compare premiums. You should start by identifying which companies offer non-owners insurance. After doing this, you can begin shopping around to do a thorough rate comparison. The easiest way to do a thorough comparison without spending an entire weekend getting quotes is to use an online rating comparison tool. By entering your personal information, you can look at instant quotes from carriers in your state. Check the insurance rates, select a non-owner’s plan, and get covered before you drive any more vehicles. Compare car insurance quotes now by entering your zip code in our FREE tool below!