Non-Owner Auto Insurance and Why It Could Be Beneficial for You

Because the name sounds odd, you may not understand non-owner auto insurance and how it could be beneficial for you. After all, why would a non-car owner require auto insurance? However, the answer just might make you think.

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Non-owner car insurance has actually been around for some time, but most people without vehicles never really consider this kind of purchase. One of the reasons why is because frequent users of other people’s cars just rely on the owner’s insurance.

If they damage the automobile, they know the car has protection. However, that does not seem very fair since the owner does not share the blame of the incident. This is why non-owner’s coverage is a good option for people without cars. It allows them to share in the financial responsibility and assume accountability for their actions.

You Learn the Value of Vehicle Ownership

This is extremely important for people who usually walk or take public transportation. They generally have no idea of what a car accident means to the owner or the victim.

First, the owner may not be able to drive their car because of the accident. They may need to file a claim and this could take a long time before they receive compensation. They also have to pay a certain deductible before the car insurance company will begin to pay for repairs. This could cost the car owner anywhere from $500 to $1,000 depending on their selected deductible.

Second, if someone does have a life-threatening injury, this could lead to excessive medical payments. The owner is also responsible for this portion according to their policy obligations.

Third, the owner may have to rent a car and this means even more money out of their pocket. Without access to another vehicle, they might jeopardize their livelihood, all because of your collision.

Being a car owner carries many responsibilities and a car accident is a tremendous imposition.

The Federal Motor Carrier Safety Administration reported 12,763 buses and 112,379 truck accidents in 2010. More than half of these involved collisions with passenger automobiles. Thankfully, these were non-fatal accidents, but the damage produced hundreds of thousands of dollars in auto insurance claims.

Even in small rural states like Tennessee there were 1,032 automobile fatalities in 2011. It is not just the big cities with tragedies, and this is why non-owner car insurance is so important.

When you consider these statistics, you might decide to help your friend or relative the next time you decide to ask to borrow their car. This is certainly the case when they have limited coverage because if you purchase a non-owner car insurance policy, you can pick up the difference in many areas.

You Could Need Medical Attention after a Car Accident

The same is true for you if you receive injuries after a car accident. No one should automatically assume that the driver of the borrowed vehicle caused the problem. It is just as easy to believe that you did everything correct and someone hit you.

If this is the case, you should not need to rely only on medical payments from the driver or the owner of the vehicle someone loaned you. However, it is important to remember that non-owner’s automobile insurance only applies once the responsible party’s personal policy reaches the limit.

Then again, if they only have basic liability coverage with low limits, you will need the extra protection from your own policy. If you live in Florida the minimum limit is only $10,000. That may not be enough to pay for everything.

You have no idea what the average cost of medical care is when you are involved in a major collision.

The medical costs start adding up once the police request an ambulance to transport you to the hospital for your injuries. Once you arrive at the hospital, medical personnel will then run dozens of tests before they determine the severity of your injuries. If surgery is required, your expenses will grow even larger.

After only a short while, the money from the car owner’s policy could run out. According to Consumer Health Ratings, one visit to the emergency room could cost as much as $1,318, and this is only the beginning of your ordeal.

Pedestrians Also Receive Protection

You could even receive protection if you do not drive a car, but another car hits you. This is an excellent reason to purchase non-owner’s car insurance. This is especially true if the collision involves a hit-and-run driver. Any accidents related to driving, whether you operate a motor vehicle or not can provide you with sufficient coverage to ensure you recuperate properly.

The only issue with using non-owner’s car insurance for medical payments is the state where you reside.

Some states with at-fault auto insurance laws may delay processing your claim until they make every attempt to locate the driver. This could seriously affect your ability to pay your medical costs.

However, in no-fault states, this should not apply. These states allow car insurance companies to make immediate payments to anyone who files a claim.

Legal Problems with the Owner or the Car Insurance Company

When you ask permission to use someone’s vehicle, their trust is placed on you. They believe that you will return the car in the same condition. Unfortunately, we do not live in a perfect world and things happen beyond our control every day. This means you could have an accident and even if it is not your fault, there may be serious problems.

Another regrettable reality is the owner of the vehicle may decide to sue you for the damages that their car insurance company cannot or will not cover. This may not sound likely, but think again for a moment. People get very upset over their cars, especially if you cause a lot of damage.

Car insurance companies also have the right to pay a specific amount for claims by basing the payment on the adjuster’s report. Once they review the documents and the current value of the vehicle in question, they could decide to pay a fraction of the cost for repairs. Where does this leave the owner?

Most people do not have thousands of dollars in their bank accounts.

They could easily hold you responsible for the balance to make things right. Since it is their car, they can seek restitution from you. If you choose to ignore their request, the next step could land you in small claims court or worse.

In addition, the car insurance company could come after you once they pay the owner for their claim. Many choose this option if the amount is substantial. They need to recover their loss and the fastest way to accomplish their goal is to take you to court. A non-owner’s car insurance policy is the best way to protect you from a situation just like this.

Frequent Users of Rental Cars

Many business people need rental cars when they travel. They may not need a car regularly because they work near trains or take taxis, like native New Yorkers. Very few people who live in Manhattan actually own a vehicle. The traffic is a direct result of commuters from New Jersey and Connecticut. However, traveling to different cities and states often requires rental cars.

If you use the services of a rental car agency at least two to three times per month a non-owner’s car insurance policy will save you money.

Instead of selecting the rental company’s car insurance, which is not cheap, you can simply present your insurance identification card when you rent a car. This allows you skip that entire process.

Some car rental agencies charge as much as $10 to $15 per day. If you have the car for a week, you would spend $70 just in insurance. Think about how quickly this adds up by calculating three rentals per month. In total, you would spend about $210 per month in addition to the cost of the rental car.

Non-owner car insurance policies consist of liability and personal injury protection coverage. This means you could realistically pay about $300 to $500 per year. After drawing this conclusion, it does not seem feasible to pay over $2,000 for car rental insurance on an annual basis.

There is No Deductible

Another benefit for people considering purchasing a non-owner car insurance policy is they do not have to pay a deductible. This is very different from standard auto insurance where deductibles are usually required for every level of coverage.

If you need to file a claim because of an injury or damage to someone’s property, you can contact your car insurance provider and explain the situation. They will need to speak with everyone involved to confirm limits and prepare the proper paperwork. However, they will never ask you to pay any out-of-pocket expenses towards your claim.

This is because non-owner’s car insurance acts as a backup to the owner or victim’s primary car insurance. Car insurance companies that provide this kind of coverage seldom pay large amounts for claims; therefore, they can afford to eliminate the requirement of a deductible.

You should keep this in mind when you select your limits because the amount you choose does not affect the annual rates, like conventional car insurance. This allows you to go above state minimums and pick something that virtually guarantees full protection.

Non-owner’s automobile insurance is a good choice if you want to ensure prompt payments for issues you cause or become involved with because you can settle the matter quickly. It may not be the best choice for everyone, but it surely is a wise investment for anyone who wants an additional tier of security.

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