What you need to know about non owner car insurance

People who own their own cars sometimes talk about “insuring their car.” Interestingly, though, car insurance may not even cover the car – it’s an option, but it’s not required. The reason car insurance is required is because it insures the driver. As a driver, you are responsible for any injuries or damage you cause if you're at fault in an accident.

So, what do people who don’t own a car do to insure themselves in a rented, borrowed, or shared car? That’s where non owner auto (or non owned auto, or named non-owned, or nonowner insurance – we can’t seem to settle on a name) comes in.

We’ll walk you through what this kind of car insurance is, what it covers and how much it costs, and where you can buy it.

Coverages that are part of a non owner auto policy

Liability coverage for bodily injury or physical damage

The most basic non owned auto insurance policy covers your liability, or legal responsibility, if you’re the driver at fault in a crash. So this covers damage to other people, and other people’s belongings, not your own.

Remember that “at fault” here is a legal term, not a moral term. So, in a one car accident that takes out a mailbox? You’re probably at fault by definition. Rear end someone who slams on their brakes for no reason? Ditto.

There may be car insurance on the car you are driving which may provide some coverage if you crash your friend's car. If you have your own, though, you know you’re covered up to the limit on your policy.

Uninsured and/or underinsured motorist

These coverages are sometimes required and often an option. They protect you and your passengers from drivers who have no insurance (up to 20% of all drivers in some states!). If you get hit by one of these drivers, your insurance pays for your injuries and lost wages, up to the limit on your policy.

Personal injury protection (PIP) or Medpay

These may be optional or required coverages, and sometimes only one of them is available. They cover your injuries and your passenger’s injuries. Medpay pays for medical bills, while PIP covers lost wages, too. The limits are often low - $5,000 or $10,000, so they’ll help but won’t be enough coverage in a major car crash.

Coverages that are not a part of a non owned auto policy

Damage to the car you’re driving

Unfortunately, non owned auto policies don’t cover the car you’re driving. If you’re using a borrowed car, covering the vehicle itself is the responsibility of the owner. They have to buy coverage for their car on their own policy. If you’re driving a rental car, make sure you have coverage on the car. (Your credit card may offer insurance, or you can buy it for the car at the rental car counter.)

Who should consider a non owned auto policy

If any of these describe you, you should consider non owned auto insurance:

You want to maintain insurance coverage

Some day you may choose to buy a car. Turns out most auto insurance companies give much cheaper prices to people who haven't had a lapse in their car insurance history. You'll often have to show a copy of the declarations page (the page of your policy that shows the coverage you have) to prove that you've had insurance. Your Surround declarations page may save you several hundred dollars a year when that happens!

You frequently rent cars

If you rent cars for personal travel, having your own liability insurance can save you a lot of money. The liability coverage at the rental car counter costs about $20 a day. If you rent two or three days a month or more, non owned auto may be cheaper.

You borrow cars from friends

If you borrow cars from a friend or a relative once in a while, non owned auto can give you peace of mind.

Their insurance will usually cover you if you borrow their car with their permission. (Be careful, though. This isn't true if you drive the vehicle frequently or live in the same household. In those cases you’d need to be a listed driver on their policy.)

If you have a non owned auto policy, you don't have to ask if your friend has enough insurance. Or if they've paid the bill. You've brought your own coverage to the party.

You borrow shared cars

Shared cars for personal use usually have a small amount of insurance that comes with the share. You can also often buy more insurance up to more reasonable limits. (Personal use is taking a Zipcar or Turo to Ikea, not driving for Uber or Lyft.) Depending on the cost and how often you borrow a car, a non owned auto policy may be a better choice.

You bike in traffic

This one sounds weird, we know. But remember that uninsured/underinsured motorist coverage? If you choose to buy it, it covers you if an uninsured or underinsured driver injures you or damages your bike or your gear. This includes a hit and runs. If you’re commuting by bike, or riding around cars a lot, non owned auto may be a good choice for you.

You're a passenger

This scenario is like the bike example above. Uninsured or underinsured motorist coverage also covers you as a passenger, if the driver of the car you're in doesn't have any insurance, or as much as you do. This applies regardless of whether you're in a taxi, a shared car, or your buddy's old beater. If this is a worry for you, getting yourself a non owner policy is a good idea.

You want to buy an umbrella policy

Most of the time insurance companies require you to have an auto insurance policy to buy an umbrella policy. If you don't own a car, the solution is to buy non owner insurance. Read our article about what an umbrella policy is and why you may need nonowned auto insurance to buy umbrella insurance.

When you may not need a non owned auto policy

Sometimes non owned auto is not the best option. Here are the most common scenarios:

• You frequently drive someone else’s car, or you live with the person whose car you drive. They need to list you as a driver on their policy, which gives you the same protections as your own policy would. This includes if you're a long term houseguest.
• You rent or borrow cars outside of the United States or Canada. Most policies only cover driving in the US or Canada. If you’re driving abroad, you’ll need a different kind of coverage.
• You are already listed on someone else’s policy. Like your parent's policy when you’re in college. In this case, you’re already covered.
• You drive for pay. If you drive for Uber or Lyft, or similar, you need a commercial insurance policy. Check with your carshare company – they generally have policies drivers can buy.
• You’re driving for work. Your company needs to have commercial auto insurance in place. This includes any freelance gigs you have, like driving merchandise to a craft fair. Note that commuting to and from work is not considered driving for work – it’s personal use.

Other options besides a non owned auto policy

There are other options for driving coverage.

• Borrowed car - Check with the car owner about how much insurance they have. Then you can decide if you are comfortable with the response. You can also ask them to add you to their policy if you borrow the car often, though this may cost them.
• Rental car - You can buy coverage at the rental car company. Your credit card may also cover it.
• Carshare - You can often buy extra insurance within the app.

These are all reasonable solutions. You just need to remember to take care of insurance each time you drive. And, if you drive more than a couple of times a month, these may end up being expensive.

Where can you buy a non owned auto policy and how much does it cost?

Non owner auto insurance should cost you about $30-50/month. This kind of policy is not usually sold online, so you’ll need to call to get a quote. Pricing is based on your state, driving record, limits, and which coverages you select.

Many of the insurance companies that sell regular car insurance also sell non owned auto. So, you can try GEICO, or Progressive, or talk to an insurance agent, though availability is often limited.

Why can non owned auto insurance be so hard to buy?

You may find yourself making a lot of calls to try to get a policy. Why?

First, car insurance for people who own cars is a much bigger market. Most drivers in the US own cars. They are more likely to buy auto insurance, and the average price tag is a lot higher when there's a car on the policy. That means car insurance companies just aren’t focused on non owned auto. They may never have built an online quote for it, for example.

Second, insurance is a slow moving industry. Giving up your car for more sustainable solutions has been a trend for a while. The insurance industry hasn't built products for people making this choice yet. This is one of the reasons we started Surround: we build new insurance products for modern consumers. And yes, we sell non owned auto insurance online across most of the US.

Why did my insurance company nonrenew my non owner policy?

Oof, we get this one a lot too. Unless you've suddenly had a lot of accidents, the answer is related to why non owner insurance is so hard to find in the first place. In short, large insurance companies specialize in insurance for people who own cars. They've set up their systems, product, pricing, and training for car owners. As a result, they don't sell a lot of non-owner coverage.

And sometimes, they decide they'll become more efficient if they stop selling non owner insurance. Is that true? We don't know. But if you've been nonrenewed, we're happy to take your call here at Surround!

Carless, not careless

Non owned auto is drivers insurance. If you frequently borrow, rent, or carshare, getting your own policy gives you peace of mind and saves you money.

PS - wait, is this the same as hired nonowned auto?

Depending on the exact search terms you use, you may get a bunch of links for a product that sounds similar – hired nonowned auto. This product is for companies whose employees drive vehicles the company doesn’t own. The “hired” in the name is specific to commercial insurance. If you’re looking to cover yourself as an individual, it’s not the product you’re looking for.

PPS - if I buy a car, will my non owner auto insurance policy cover me?

No, you non owner auto insurance policy doesn't cover you once you buy a car. Congrats on the wheels, though, and give us a call or read more about how to upgrade to auto insurance!

If you'd like to read more about insurance at school, check out our guide to insurance for college students. If you rent cars frequently, learn more about what credit card insurance covers in a rental car crash.