Non owner car insurance refers to a special type of liability coverage that protects drivers operating a vehicle they do not own. Typically these insurance policies are carried by those who reside in large cities and rely primarily on public transportation, or those persons who frequently borrow a car belonging to a friend or neighbor. This kind of policy may come with certain insurance limitations and is not available from all coverage providers.
Who Could Benefit from Non Owner Car Insurance?
Many people have insurance policies on their vehicle(s) that cover not only themselves but other drivers as well. This is a typical aspect of most comprehensive car insurance policies. These additional drivers do not have to be family members; many auto insurance policies offer liability protection as well as collision insurance no matter who is driving the vehicle. However if a vehicle owner carries a policy that covers only the primary driver, an accident caused by someone else operating this car will mean that there is no liability coverage and the vehicle owner will be responsible for damages. In this case, a non-owner policy for this family friend or neighbor would be quite beneficial.
People who have no vehicle of their own but frequently rent a car for the weekend or for business travel may also benefit from carrying a non-owner policy. Rental car agencies charge a hefty price for liability coverage, as much as $30-$40 per day, and an individual who purchases a non-owner policy can save tremendously if he or she rents a vehicle on a regular basis.
What a Non Owner Auto Insurance Policy Covers
Generally a non-owner car insurance policy is much the same as a regular liability insurance coverage plan. It covers the operator of any vehicle against damages caused by him or her. This includes person injury, property damage caused by the vehicle and damage to any other car involved in the accident. With few exceptions, non-owner car insurance refers to liability coverage only and does not include collision or comprehensive insurance; these are almost always the responsibility of the vehicle owner.
The primary reason to consider taking out a non owner insurance policy is to add to the total coverage available. If a driver borrows a friend’s car and causes an accident, the total liability may exceed the amount covered by the owner’s policy. For example, if an owner carries a total of $15,000 in coverage against property damage, but an accident caused by another driver results in a total of $20,000 of property damage, the owner would be responsible for all but the last $5,000, which would be covered by the person carrying the non-owner policy.
In such a scenario, insurance companies will indeed rule that the owner’s policy takes precedence and only the amount over the owner’s coverage limit will be covered by another driver’s non-owner policy. This is an important point concerning this special type of insurance because if no additional coverage is carried by a non-owner and driver of a vehicle that causes an accident, the injured party can attempt to seize the personal assets of this alternate driver.
Advantages/Disadvantages of Non Owner Insurance Policies
In addition to providing coverage for a person who does not own a vehicle, and the obvious savings for frequent renters of cars, the person who responsibly takes out a non-owner policy helps keep insurance premiums lower for everyone. There is also a great peace of mind with carrying a policy when driving another’s car on a long trip. And many companies favor drivers who operate their own valet service or freelance as a mover of vehicles at an auto auction or trade show. Typically a non-owner policy that provides an additional $10,000 in liability coverage will cost less than $500 per year, using the year 2010 for the price comparison tool.
There are some drawbacks to this type of coverage, however. First and foremost is the fact that with very few exceptions insurance companies will issue a non-owner policy for liability coverage only. Collision and comprehensive insurance is not included in these special policies. While it is true that there is no deductible for a non-owner insurance policy, several states do require uninsured motorist coverage and this means that an additional cost to the policy must be considered.
Parents who are considering insurance coverage for their teen drivers will almost always find it less expensive to add their son or daughter to their existing policy, especially if the vehicle owner has a clean insurance record. Although normally cheaper than regular liability coverage, a non-owner policy for a younger driver is very expensive; it is much more to the parents’ advantage to add the minor to their own policy and obtain complete coverage including collision and comprehensive protection.
Shopping Around for Non Owners Auto Insurance
An internet search will quickly reveal to the individual just how differently insurance companies price their services. This is due to the fact that although the facts/figures/statistics concerning accidents are known to all those in the insurance business, the way in which a particular company structures its programs can be quite complicated depending on what the carrier specializes in. A non-owner policy will vary greatly in cost from one company to another, mainly because the competing companies will have different levels of protection available.
Company “A” may only offer non driver insurance policies starting at $25,000, while Company “B” may offer a package that starts out at a $10,000 maximum. Also each one of the 50 states is required by law to have their insurance companies provide liability coverage for those who cannot afford the market rate; these subsidized packages may or may not include reduced prices on non-owner policies. Obviously there will be differences depending on the age group as well. Getting cheap car insurance for veterans may be easier than trying to get cheap car insurance for young men drivers because the latter is in a much riskier age group. Another tough scenario would be trying to get a good deal on car insurance for drivers with medical conditions, but doing your research is going to make a huge difference in the deal you end up with.
Additional Considerations for This Type of Policy
Most insurance carriers will have specific limitations on their non owner auto insurance policies. Some will not offer this type of policy to drivers under a certain age, nor will they allow the coverage to extend to company vehicles that are driven for personal use by an employee.
When considering a non-owner car insurance policy the advantages must outweigh the disadvantages for the driver, otherwise money is certain to be lost. Choosing an insurance company that offers a good price for this kind of coverage is a start, but the overall requirements of the individual as pertains to car insurance is the most important factor. If you are constantly asking “How much should I pay for car insurance?” then getting instant car insurance quotes online should help you get a good idea because you can easily compare the pricing options yourself with the coverage you are being offered.