Non-Owner Car Insurance vs. Temporary Insurance

Introduction: The Short-Term Coverage Illusion

If you don’t own a car but still drive frequently, stop yourself before you search for 1-week car insurance. Temporary policies aren’t the norm, what you actually want is non-owner car insurance, the legitimate industry standard for frequent non-owner vehicle drivers.

In this guide, we will go over the pros and cons of non-owner car insurance, who needs (or doesn’t) need it, and why the secondary liability protection is so important.

How Does Non-Owner Car Insurance Work?

Non-owner car insurance covers and follows you, the driver, instead of the vehicle. This is great if you expect to be driving cars that you don’t own in the upcoming year.

What It Covers

Collisions are a huge concern when you drive, whether that’s your own car or someone else’s. Most non-owner car insurance policies will focus on the same major risks, such as:

Bodily Injury: If you get into a crash with medical expenses, non-owner car insurance policy can cover eligible bodily injury claims for other parties.

Property Damage Liability: Insurance can also cover any damages that you cause to other people’s property in case of an accident, such as someone else’s car or building.

Optional Add-ons

Depending on your insurance company, they may offer optional add-ons you can get to tailor the policy to your needs.

Medical Payments: You may want a MedPay add-on if you are worried about medical payments. It can help pay for medical bills and funeral expenses regardless of who was at fault in the collision.

Personal Injury Protection (PIP): Covers your own medical bills and lost wages if you get into an accident while driving. Many times this is offered in states where it is REQUIRED to have PIP coverage for drivers, even if you do not own the vehicle. It is often a good idea to have PIP since the potential costs of a medical catastrophe can be extreme.

Uninsured or Underinsured Motorist Coverage: In some states, you may want to carry uninsured motorist insurance. It essentially covers OTHER drivers who have no insurance.

Secondary Coverage Rule

Non-owner auto insurance typically counts as secondary coverage. This means that if whoever owns the vehicle has their own auto insurance coverage, their liability insurance will kick in first before your non-owner car insurance covers amounts that exceed the owner’s policy limits.

Non-Owner Car Insurance Exclusions

Non-owner car insurance isn’t comprehensive coverage. It doesn’t cover everything related to driving. If you are responsible for any damages to the car you are in control of driving, the insurance won’t cover those physical damages.

In addition, if you live with anyone who owns a vehicle, you might not qualify for non-owner car insurance for those cars. The insurance companies typically expect you to be listed on any immediate household members’ primary auto insurance policy as secondary drivers.

What Is Temporary Auto Insurance

Temporary car insurance is supposed to cover you for a short period of time, ranging from a single day to several months. You may want temporary auto insurance if you are:

• Borrowing a vehicle ONCE
• Renting a car
• Test driving
• Moving a vehicle to some other place

Temporary auto insurance is rarely the best type of coverage you can get because it does not provide safe coverage. Major insurance companies auto tend to avoid offering temporary car insurance policies since they want you to get coverage for at least 6 months, so you have limited options to pick from.

If you already have an auto insurance policy, it MAY cover you driving someone else’s car in a few cases (or theirs may cover you), but this depends on the exact policy and state laws.

The Price Comparison: Non-Owner vs. Daily Temporary Add-Ons

The Cost of a Non-Owner Car Insurance Policy

Because non-owner drivers log fewer overall miles, insurers can end up pricing these policies at roughly 20% to 25% of standard auto insurance rates. That means that a non-owner car insurance policy could cost around $300 to $700 a year, or a low $30 to $60 a month.

With a non-owners driver policy you can save a significant amount of money because it provides protection as if you had a regular auto insurance policy except for your non-owner situation.

Temporary Insurance Costs

It’s risky to rely on auto insurance from the rental agencies themselves. There are also third-party daily apps that provide temporary insurance, which go from $15 to $30 per day for liability. For all of these options your costs can easily exceed $300 for just a few weekends of driving, which could have netted you non-owner car insurance for an entire year. That makes non-owner insurance policies typically much more financially worth it for non-owners of vehicles.

Non-owner Car Insurance vs Temporary Insurance Cost Difference

If you buy an ongoing non-owner policy, in a way it pays for itself after just 10 to 12 days of driving a borrowed or rented car per year. It becomes cheaper than the temporary car insurance policies you can get for the same period of time.

Of course, if you never get into a car incident, then just like regular auto insurance, it can feel like a ‘waste’. However, it is not safe to think about auto insurance in this way since no one can truly predict what happens on the road. Never forget, if you borrow a friend or family member’s car and get into an accident, being unable to deal with the expenses can severely strain your relationship.

Permissive Use and The Risks of Borrowing Cars

Permissive Use of Other People’s Cars

Most car owners’ policies will cover a few occasional drivers who borrow their vehicle, as long as it is with permission that is either implied (e.g. your sibling tells you you can use the car whenever) or written.

With permissive use, the owner of the car will have their own insurance policy kick in to cover eligible expenses if you get into an accident. Your auto insurance is considered secondary coverage that only activates after the owner’s insurance policy reaches its limits.

However, there are details that could change who is liable for expenses. For example, if you are specifically excluded from someone’s auto insurance policy and you borrow their car, their policy will not activate if you get into an accident driving it. This can cause huge problems.

If you live in the SAME HOUSEHOLD as the owner of the car, you have to be put on their policy in order to be covered.

Low Coverage Limit Risk

If your friend only carries their state’s minimum required liability insurance for cars, but a crash that you get into costs much more than that, then the other parties involved in the crash can target your personal savings for the exceeding amount. That is why it is highly recommended to carry a significant amount of auto insurance in order to stay protected.

How Non-Owner Coverage Saves Relationships

The non-owner car insurance policy can bridge the financial gap so your friend's insurance policy isn’t overwhelmed. Your own policy can go a long, long way in preventing personal financial ruin as well as awkward disputes with loved ones and whoever’s letting you use their car.

Benefits of Non-Owner Policies

Getting a non-owner car insurance policy can help give you insurance even when you’re borrowing or renting a car. But this coverage isn’t the only advantage you can get. Here are some of the additional benefits you can obtain with a non-owner car insurance policy.

Preventing a Coverage Gap

Auto insurance companies may charge a significantly higher rate if you’re a driver who has a lapse in insurance coverage. They may question why you have stopped buying auto insurance, which may be because your risk is increased.

A non-owner car insurance policy keeps your continuous insurance history intact, guaranteeing lower rates when you eventually buy a car.

Non-owner Insurance for Rental Cars

When you rent a car, you are required to carry a certain amount of liability insurance (depends on your state). Many people decide to just buy it at the counter, since it’s fast and convenient. However, rental car company policies are expensive. They know that most people do not know alternative coverage exists.

Carrying the right non-owner’s car insurance can satisfy the liability requirements at the rental car counter, allowing you to bypass expensive rental company fees. Of course, you may still need to pay if the rental counter has any specific requirements, but these fees are much smaller.

The more often you rent cars, the more non-owner car insurance makes financial sense.

License Reinstatements & SR-22s

Do you need to keep your license valid for whatever reason? Non-owner car insurance can be the best coverage option for the drivers who need to maintain liability proof (or file an SR-22 form) in order to keep their license valid. This can often be tricky if they do not own a vehicle.

An SR-22 is a form filed by your insurance company to guarantee you are carrying the minimum liability insurance as required by your state.

When NOT to Buy a Non-Owner Policy

Despite all its advantages, a non-owner policy still isn’t for everyone. Here are the main reasons to not get a non-owner car insurance policy.

Same-Household Vehicles

Let’s say you plan to borrow a car owned by a roommate, parent, or partner you live with. In these cases, you usually must be added as a listed driver on their existing car insurance policy. You cannot get covered if you are not listed, since you live with the car owner.

Regular or Daily Borrowing

Do you drive the exact same person’s car every single day to commute? Even if you do NOT live with them, this can be a huge risk. This type of daily borrowing cannot qualify as secondary borrowing since auto insurance companies will count it as primary usage. Be sure to ask your auto insurance company to see what kind of borrowing is not covered so that you do not accidentally borrow a car and drive it while uninsured.

Business or Rideshare Use

If you end up using a borrowed car or are driving DoorDash, Uber, or commercial deliveries (requires commercial endorsements), you probably do NOT want a non-owner policy.

You absolutely need specialized auto insurance if you are performing any commercial operations, such as food delivery or ride share. Your ride share company may already provide commercial auto insurance if you drive for them, but it is always smart to see whether you have any risks that require insurance to protect you from.

Conclusion: The Smart Driver's Workaround

Don’t settle for a temporary auto insurance policy when it’s not just worse, but also often more expensive than non-owner car insurance. Save money and relationships with the car owner by getting the right non-owner insurance policy if you plan to borrow a vehicle in the next year.

Contact one of the best auto insurance companies to get started with insurance that follows you around today.