Is Non-Owners Insurance Necessary for Non-Owners?

Non-owners insurance is necessary for non-owners if you currently borrow or even rent a vehicle often. This level of auto insurance protects you in many ways. There are some major differences, however.

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Most consumers are not aware of this type of coverage because it is not very popular. Under normal circumstances, the owner of the vehicle is protected by their personal policy.

On the other hand, the Texas Department of Insurance recommends this type of car insurance. It is an inexpensive way to add a level of protection for frequent borrowers and owners.

You can make sure you carry your weight when you drive someone’s car, as this is the right thing to do. Do not only rely on the owner and their car insurance. If they are gracious enough to loan their vehicle out, make an effort to retain some responsibility.

The Reason for Non-Owners Car Insurance

There are many people who have a driver’s license, but no car. This does not mean they do not drive. They may use a relative’s vehicle, like an older aunt or uncle. They may use their grandparent’s car three or four times a week. This type of car insurance is perfect for these scenarios.

For example, suppose you have a relative who does not drive often. Perhaps they are seniors and prefer other modes of transportation. Instead of leaving the car parked in the garage, they let you use it occasionally.

They still own their vehicle and carry the required level of car insurance. This protects anyone else who uses the car. However, what happens if an accident occurs? Of course, the owner’s car insurance pays for the damages.

Take it a step further. Consider the level of coverage. If the damage surpasses the limits, the owner may need to pay out-of pocket expenses. This is not fair since they did not cause the problem. This is why auto insurance carries offer non-owners policies.

Although limited, it can supplement the costs. This will save the owner from additional charges. Included in the choices are liability and uninsured/underinsured motorist options. You can also select medical payments coverage and personal injury protection.

Non-owners auto insurance also applies to rental cars; so if you use a rental car more than five times a year, you may want to look into this option.

The rental car process always requires proof of insurance. Most people who already have car insurance can skip this step. However, if you do not own a vehicle, you do not have a standard policy.

Some car rental agencies, such as Enterprise Rent-A-Car will ask you if you want to select their coverage. They provide you with a waiver including your selections, which can be a bit pricey. If you decline, you must indicate your decision on their contract. You will save the fee, but open yourself for liability issues.

You are now responsible should something happen. This applies to the car and medical costs. If you are injured, you are in trouble. You also have to pay for the damage to the vehicle. However, if you have a non-owners insurance policy and select their damage policy, you have great overall protection.

The Typical User

The typical user of this type of auto insurance is someone between 21 and 30. This age group usually just finished college and cannot afford a car and standard insurance. Instead of purchasing their own car, they tend to borrow. It is a great way to save money while still enhancing driving skills.

Another demographic includes residents of large, metropolitan areas. They often rely on mass transportation like trains and buses. However, they have a valid driver’s license. They may not need a car of their own consistently. They prefer to borrow a vehicle when they really need one.

A smaller group includes valets. They are responsible for delivering cars to their customers. They can travel from city to city or across the country. They do not own these cars, so they do not need extra insurance. Most customers have insurance on the vehicle that the valet drives. The customer’s car insurance protects against damages. The valet’s insurance protects against injuries.

Invalid Uses

While there are many uses for this type of insurance, some are invalid. It is important that you know the difference before applying for a quote. They include the following:

• Vehicles that bear your name on the registration – You cannot register a vehicle with your name using non-owners insurance. This nullifies your contract. A vehicle registration denotes ownership.
• Vehicles that bear your name on the title – This is the same as a vehicle registration. The title means you are the owner. Therefore, you must apply for standard car insurance coverage.
• Commercial or company cars – If you have access to a company car, your employer should have insurance already. If the vehicle is of the commercial variety, the level of insurance should match the registration. You cannot utilize this type of car insurance as extra coverage while driving.
• Your spouse or child’s vehicle – This relates to any immediate member of your family residing with you. It can expand to any other person living under your roof, including a roommate. When you apply for the coverage, your information goes through a verification process. The car insurance company will match your address with anyone who has a valid driver’s license. They can tie you together using this data.

When you purchase your own vehicle, you must obtain a standard level of car insurance.

Make sure you notify your carrier of your intent to purchase a car. They should be able to create a new policy for you with the same levels. The transfer should take less than a few minutes.

Obtaining Non-Owners Car Insurance

Since this level of car insurance is uncommon, it can be a little challenging to find. Not all car insurance companies offer this type of coverage. Those who do may charge more. You need to locate a reputable company with comparable rates.

Luckily, you have a good resource in the Insurance Consumer Advocate Network. They have a list of all of the insurance departments in America. Instead of countless Internet searches, start here and cut your research time in half.

Call your state representative and find out which companies are in your area that can help you. You may even find many online carriers. From there, the process is easy; it is just like selecting standard car insurance.

The only difference is you have fewer decisions to make. A regular auto insurance policy is filled with options. You must understand multiple terms and decipher deductibles. You can get confused very easily.

With a non-standard policy like this, all you need to do is pick your limits. You should try to go well over the minimum amounts. This is because your insurance is really a back up to the owner’s coverage. It only applies after their amounts reach the maximum.

A great way to ensure perfection is to discuss your choices with the car owner. Find out what levels they have. You can build on theirs. You will definitely make an impression by showing how much you care.

Average Annual Cost

The average annual cost is very reasonable. According to the Insurance Information Institute, your rates can range between $200 and $300 per year. They are similar to umbrella policies. When you consider the amount of an average standard policy, you can see the savings.

The amounts fluctuate according to your driving record. However, because you do not have standard car insurance, you do not have a history of filing claims. When you first apply for your quote, they can only review the past three years with the Motor Vehicle Commission. Instead of looking at other reports to determine your risk, they are limited.

Most car insurance providers calculate rates using your insurance history.

They also look at mileage and this is why people with good driving records and low mileage get low rates.

Your quote may be very similar to the reported average because of this. It might even be lower. That is one more reason to choose this kind of coverage. You do not have to worry about damaging your finances so you and the car owner can both relax.

The Downside of Non-Owners Car Insurance

Of course, there are some drawbacks involved. For starters, you cannot purchase collision coverage. If you cause damage to your friend’s or relative’s car, your insurance will not cover the loss. They will have to file a claim and wait for reimbursement.

The process can be a little complicated. Most people do not utilize this kind of insurance because it can be simpler to add them to their policy. This is called an additional or auxiliary driver. Many times the cost is cheaper to the owner.

This is why it is important that you research your options carefully. Just like a traditional car insurance policy, everything differs. Your carrier may allow certain things and deny others. It really depends on the way they do business. Some may limit you from borrowing from all family members, not just those in your household.

Others may not care whose car you use, but deem the word frequent differently. They may say occasional use is two or three days a week. However, frequent use is more than five times per week, every week. It is up to their guidelines. Your best decision is to find a company that works within your lifestyle.

The competition for car insurance companies is fierce so you should be able to find one without too much hassle.

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