What is Non-Owner Car Insurance? (And How Much It Costs)

If you often rent or borrow cars, you may need car insurance coverage even if you don’t own a car. This type of insurance is called non-owner car insurance, which provides you with some level of protection if you get into an accident.

Non-owner car insurance is designed for licensed drivers who don’t own a car. In large cities like New York City or Chicago, people may depend on public transportation to get around on a day-to-day basis, but rent a car if they need to travel outside the city.

Let’s explore the coverage you get with non-owner auto insurance and how much you may pay for it.

What is non-owner car insurance?

A non-owner car insurance policy is a form of liability insurance for licensed drivers who don’t own a car. This coverage is also known as non-drivers insurance.

Non-owner car insurance provides liability coverage for property damages or injuries you may cause to the other driver in an accident. It can also help protect you from the financial liability of an accident.

In addition to bodily injury and property damage liability coverage, non-owner auto insurance policies can provide liability protection against underinsured or uninsured motorists, medical payments, and more.

How much is non-owner car insurance?

A non-owner car insurance policy is often cheaper than a full-coverage car insurance policy. This is because non-owner car insurance doesn’t include collision or comprehensive coverage that would pay for damages to a vehicle you own. Since you don’t own a car, you don’t need the additional collision and comprehensive coverage.

The average cost of non-owner car insurance is $474 per year, but the actual price you pay depends on the state you live in and your insurance company. There are several other factors that affect car insurance rates. These factors may apply to non-owner car insurance as well, including:

• Age
• Gender
• Marital status
• Education
• Occupation
• Driving record
• Credit score
• Driving history
• Number of miles you drive annually

To get the best rate, it’s important that you get several car insurance quotes from different insurers and compare their cost and coverage.

What exactly does non-owner car insurance cover?

Non-owner car insurance helps protect you against several types of liability. A standard non-owner car insurance policy provides you with:

• Personal injury liability protection: This protection helps pay for the medical costs associated with an injury the other driver sustains in a car accident that you cause.
• Property damage liability protection: This protection helps cover the cost of damages to another vehicle or property in an accident that is your fault.

Most states require all licensed drivers to carry a minimum level of liability insurance. For example, Wisconsin drivers must have the following minimums:

• $25,000 bodily injury liability protection per person
• $50,000 bodily injury liability protection per accident
• $10,000 property damage liability protection per accident

Additional coverage for non-owner auto policies

Some non-owner car insurance policies may offer additional coverage on top of liability protection:

• Medical payments: Also known as personal injury protection (PIP), this coverage helps pay for medical bills for you and your passengers in the event of an accident, regardless of who was at fault.
• Underinsured or Uninsured motorist coverage: This coverage helps pay for medical bills or other damages if you are in an accident caused by someone who doesn’t have insurance or has inadequate insurance coverage.
• Rental car liability coverage: This coverage pays for injuries or property damages from an accident you cause while you’re driving a rental car. It may also help with your or your passengers' medical costs, but it doesn’t cover any damages to the rental car.

If you often rent a car, getting a non-owner car insurance policy may be cheaper than repeatedly buying rental car insurance through a rental car agency. Keep in mind that rental cars are already insured, so you don’t technically need insurance to drive one. However, you’re responsible for any damages to the vehicle you rent.

Coverage not offered by non-owner car insurance

Non-owner car insurance doesn’t provide comprehensive or collision insurance. These coverages are typically offered together as full coverage.

Comprehensive insurance helps cover non-collision damages, such as theft, vandalism, or weather-related damages, to name a few. Collision insurance helps with the costs of damages following a crash, whether that's a single-car crash like hitting a telephone pole, or a collision with another car.

Who is non-owner car insurance for?

A non-owner car insurance policy is a great fit if you don’t own a vehicle, but you often rent or borrow cars from friends or use a car-sharing service such as Getaround or Zipcar. You also might consider getting non-owner car insurance if:

• You are required to file an SR-22: If you’ve had a DUI or enough at-fault accidents that your driver’s license has been suspended, you may have to carry an SR-22 insurance form showing you have the minimum liability coverage required by your state. Your insurer can provide you with a non-owner auto coverage policy that satisfies the requirements to have proof of insurance even when you don’t own a car.
• You want to prevent a gap in your insurance coverage: A lapse or gap in your car insurance coverage can result in higher rates later since insurance companies may label you as a high-risk driver. Getting a non-owner car insurance policy keeps you covered until you switch to a standard policy.

Non-owner auto policies only provide coverage for the insured driver, and not for other drivers in the same household, like a spouse or teenage driver.

How to find affordable non-owner car insurance

Not all insurance companies offer non-owner car insurance policies, and if they do they may only provide them for existing customers. This type of coverage might not be available in your state.

There are some things you can do to save money on car insurance if non-owner auto coverage is available in your state. This includes shopping around, qualifying for discounts, and maintaining a good credit score.

Shop around

Some insurance companies may only provide non-owner car insurance for their existing customers. Reach out to your current insurance company to find out if it’s something it offers.

You should also reach out to three or four of the best car insurance companies to find out if they offer non-owner coverage for new customers and, if so, what their auto insurance rates are. The non-owner car insurance costs can vary depending on the insurance company, your state, and several other factors.

Ask about discounts

Most insurance companies offer discounts to their customers. Ask if discounts also apply to a non-owner car insurance policy. Available discounts can include:

• Good driver discount
• Good student discount
• Customer loyalty discount
• Policy bundling discount
• Automatic payments discount

Keep your credit score up

Your credit score and how diligent you are in paying your bills on time can impact what you’ll pay for car insurance. The lower your credit score, the higher the premiums insurance companies often charge. That’s why a good credit score can help you get a lower premium.

Non-owner car insurance FAQs

Bottom line

You can continue to have auto insurance coverage even when you don’t have a car. A non-owner car insurance policy provides liability protection when you rent a car or borrow a friend’s vehicle. A non-owner car insurance policy also comes in handy when you want continuous coverage during a time when you don’t have a car.