You’re at a friend’s house for dinner and they’ve just run out of tomatoes and it’s a key ingredient for their recipe. You didn’t drive your car there, so you grab their car keys to pop out to the supermarket. A few blocks away, you just manage to swerve out of the way when someone drives out a side street without stopping or even looking in your direction. Luckily, everyone’s safe - but it sure gets you thinking. Do you need extra insurance to drive someone else’s car? And if you did get into an accident, whose insurance pays for it? Did you know there is a type of coverage called non-owner car insurance? But it’s not a mandatory coverage and it’s only useful for certain people.
Before we jump in, it’s important to remember that it’s illegal to drive without insurance whether the car you’re driving is yours, or it’s borrowed. In Canada, it’s the law that you must drive with a valid insurance policy to protect you, as well as everyone around you. Now let’s get into the details of what non-owned auto insurance is and look at different scenarios when you may need it.
What is non-owner car insurance?
Non-owner car insurance is just what it sounds like. It’s a type of car insurance coverage that people can purchase when they drive a car, but they don’t own one. It will protect you from the financial burden of having to pay out of pocket for injuries or property damage resulting from an at-fault crash. With a standard car insurance policy, the borrowed vehicle is usually covered as an extension of your policy. Where in the case of non-owner car insurance, it’s actually the person that is covered. Non-owner car insurance differs from province to province, so make sure to check out what the rules are where you live.
When do you need non-owner car insurance?
Here are some examples of when a non-owner policy would be needed:
- Borrowing – you borrow someone else’s car(s) frequently (worth noting, if you are frequently borrowing the same car or it’s owned by someone you live with, you should be listed on their policy)
- Rentals – you rent cars frequently. This is an alternate option to using the insurance policy available for purchase from the rental company
- Car share services – if you use a car share service frequently, you can combine the built-in coverage offered with non-owner car insurance
When don’t you need non-owner car insurance?
- The scenario at the beginning of the article is the perfect example of when you don’t need non-owner car insurance. You own a car and already have insurance. Your own car insurance will generally provide limited coverage when you borrow someone else's car or drive a rental. Grand Touring Solution® is another option you can look into if you’re renting.
- You drive a company car, but only for business reasons. Because the vehicle belongs to the company, it should be covered through your employer's commercial auto insurance.
- The car you borrow is insured and belongs to someone you live with. As long as you are listed on their policy, their insurance will cover you. But before you get behind the wheel, make sure they've added you to their policy.
How does it work if you have car insurance and someone else is using your car?
As long as it’s not a regular occurrence, it’s okay for someone to drive your car without non-owner car insurance. In the event of an accident and the driver of your car is deemed at fault, your insurance company will cover it.
TD Insurance offers extensive coverage options for all the above scenarios when non-owner car insurance isn’t necessary. You can get a quote online in just minutes or speak to an advisor to answer any questions you have.
So, next time someone runs out of tomatoes and the recipe calls for them – you can feel comfortable knowing you’re covered while also saving the day and finding the missing ingredient.
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.
If you are a licensed driver who doesn’t have car insurance, you still may have a need for car insurance. Sounds strange? Consider this: If you are someone who often borrows or rents cars, you might want liability insurance to help protect your assets, like your house and savings.
That’s where non-owner car insurance comes in. It can also get you out of other types of jams, such as being in-between vehicles or if your state requires an SR-22 (or FR-44) form.
What Is Non-Owner Car Insurance?
Non-owner car insurance is a liability policy for folks who don’t own a car but who need car insurance, such as someone who frequently rents cars or someone who is required to show proof of car insurance (such as an SR-22).
Liability car insurance coverage pays for damage and injuries to others if you cause an auto accident. For example, if you cause an accident in a car you don’t own and someone else is hurt, non-owner car insurance could pay for their medical expenses.
A non-owner car insurance policy may also contain other state-required coverages, such as uninsured motorist or medical payments coverage, but the primary focus of the policy is liability insurance.
Non-owner car insurance is a “named insured” policy, meaning only the person listed on the policy is covered. A few car insurance companies will apply the coverage to a spouse, while many will not. If both you and your spouse need non-owners auto insurance, make sure the policy you’re buying gives coverage to both of you.
Related: Can I Buy Insurance for a Car I Don’t Own?
How Does Non-Owner Car Insurance Work?
If you cause an accident in a borrowed vehicle, non-owner car insurance helps pay for the damage or injuries of others through the liability coverage the policy provides. Non-owner insurance is secondary to any auto insurance the car owner has on the vehicle.
For example, say you cause an accident while driving a friend’s car and your friend has bodily injury liability limits of $25,000, but the other driver’s medical bills are $38,000. That leaves you on the hook for the outstanding $13,000. If you have a non-owners policy with a $50,000 limit for bodily injury liability coverage the $13,000 would be covered.
What Does Non-Owner Car Insurance Cover?
If you cause a car accident—while driving a rented car or other borrowed vehicle—non-owner car insurance’s liability coverage covers:
- Bodily injury you cause to others, such as medical expenses
- Damage you cause to others property, such as car repair bills or repairs bills for objects damaged like a fence.
- A legal defense in case you are sued for causing a car accident
Depending on your state and insurance company, you may be able to get medical coverage with non-owner car insurance policy, such as:
- Uninsured motorist coverage (UM): This coverage pays for your medical expenses if someone crashes into you and they don’t have liability insurance or not enough. Uninsured motorist coverage can also cover hit-and-run accidents, depending on your state.
- Medical payments (MedPay): This coverage pays for you and your passengers’ medical bills no matter who caused the accident.
Non-owner car insurance is a secondary coverage, meaning it kicks in after any primary coverage pays. For example, if you borrow a friend’s car and cause an accident, your friend’s car insurance pays first, up to the policy limits. If the policy’s liability limits are exhausted, your non-owner car insurance can then pay (up to your policy limits).
What’s Not Covered by Non-Owner Car Insurance?
While non-owner car insurance is designed to cover a driver’s basic liability insurance needs, there are several common exclusions:
- Damage to the car you’re driving. Non-owner car insurance doesn’t include collision and comprehensive insurance, which covers a wide range of problems like car theft, fires, floods, hail, riots, vandalism, collisions with animals and falling objects. If someone else causes an accident to a car you’re driving, the vehicle’s owner can file a claim under their own collision and comprehensive insurance, or against the at-fault driver’s liability insurance.
- Injuries you suffer in a car accident. If your non-owner car insurance policy only has liability insurance, it won’t cover you for any injuries you suffered in a car accident. If you want coverage for injuries, you may be able to add medical payments coverage.
- Other drivers. Generally, non-owner car insurance policies only cover you, not your spouse or any other drivers in your household. Some insurance companies won’t allow you to have a non-owner car insurance policy if someone in your household has a personal auto insurance policy.
- Business driving. If you’re driving a car for work purposes, like delivering goods to a client, you most likely won’t be covered by a non-owner car insurance policy. Business use is a common exclusion for non-owner car insurance policies.
- Personal belongings. A non-owner car insurance policy won’t cover your personal belongings that are lost, dama ged or stolen. For example, if someone steals your laptop from a car you’re borrowing, it’s not covered under auto insurance. You may have coverage for personal belongings through your homeowners insurance or renters insurance.
When to Consider Non-Owner Car Insurance
There are a few reasons why it can be worth getting non-owner car insurance:
- You rent cars often. If you rent cars on a frequent basis, you might want non-owner car insurance so you don’t have to buy liability insurance from a rental car agency.
- You use a car-sharing service often. If you rely on a car-sharing service like Zipcar or Getaround, non-owner car insurance can provide more coverage than the company provides. For example, Zipcar provides only the minimum liability car insurance requirements.
- You don’t want a coverage gap in your car insurance. Not having car insurance creates a “coverage gap,” which car insurance companies see as a higher risk, and usually translates into higher car insurance premiums the next time you buy car insurance. Non-owner car insurance is a good way to avoid a coverage gap if you’re in between vehicles.
- State law requires you to file an SR-22 (or FR-44) form. Your state might require you to show proof of car insurance if you’ve had problems like DUI convictions, license suspension or revocation, you were caught driving without insurance, or other types of problems. Non-owners SR-22 insurance is a way to get auto insurance without owning a car.
Reasons You Don’t Need Non-Owner Car Insurance
Here are some reasons you wouldn’t need non-owner auto insurance:
- You own a car. If you already own a car, you’ll need a regular car insurance policy.
- You drive a car owned by someone in your household. If someone in your household has a car, like your spouse or parent, you should be listed on their car insurance policy.
- You occasionally borrow a friend’s car. If you get into an accident while driving a friend’s car, their car insurance policy would pay. However, if you cause an accident and their liability insurance is insufficient, you could be responsible for any damages (like medical bills or property damage) not covered by your friend’s insurance. If you borrow cars often, it might be worth considering non-owner car insurance.
- You rarely drive. If you rarely get behind the wheel or not at all, you most likely don’t need non-owners car insurance. For example, if you live in a city and only rent a car for vacation, you don’t need to buy a non-owners policy.
How Much Does Non-Owner Car Insurance Cost?
The average cost of non-owner car insurance is $748 a year, according to our analysis of annual rates from top auto insurance companies.
Non-owner car insurance costs have a large range, so it’s worth comparing car insurance quotes to find the best price. Auto-Owners is the cheapest for non-owner car insurance at $202 per year, while Nationwide is the most expensive at $1,361, among the companies we analyzed.
The cost of a non-owner car insurance policy will depend on several factors, including your state and car insurance company. Here are some other common pricing factors:
- Your driving history. Generally, drivers who avoid car accidents and traffic violations pay less for car insurance.
- Your age. Younger drivers with less driving experience can typically expect to pay more than older drivers with more driving experience.
- The amount of coverage you want. The higher your policy limits, the more you can expect to pay. We recommend buying more than your state’s minimum liability requirements. If you cause a car accident and you don’t have enough liability insurance, you could be on the hook for the rest, such as medical bills and property damage. It’s smart to have a liability insurance amount that covers the assets you would risk in a big lawsuit, such as your house and savings.
Who Offers Non-Owners Car Insurance?
Most car insurance companies don’t advertise whether they sell non-owner car insurance and some car insurance companies might only offer non-owner car insurance to existing customers. For example, we reviewed a Progressive Insurance policy that says a non-owner car insurance policy is not available at the time of a new policy purchase but is available to existing customers who choose to endorse all vehicles off of the policy. For example, if you have a policy with Progressive but get rid of your car, you may be able to choose the non-owners endorsement to maintain your car insurance.
Here are some insurers that sell non-owner car insurance. Keep in mind, these companies might not sell non-owner car insurance in every state and you may need to be an existing customer to be eligible to purchase it.
- Allstate
- American Family
- Auto-Owners
- Dairyland
- Direct
- Erie
- Farmers
- Geico
- Liberty Mutual
- Nationwide
- Progressive
- State Farm
- The General
- Travelers
- USAA
If you’re not sure where to turn, an independent auto insurance agent can help you find a policy. Also, review the policy to make sure it fulfills your needs. For instance, if you want non-owners insurance because you frequently rent cars, make certain the policy doesn’t limit how often you can rent cars.
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Non-Owned Car Insurance for Businesses
If you own a business and have employees who sometimes use their personal cars for work reasons, such as making a delivery, you may need non-owned car insurance. It will extend the liability coverage from your commercial auto policy to employees’ personal cars. It’s intended for cases where employees use their personal vehicles only occasionally for work.
Non-Owner Car Insurance FAQ
Can you get car insurance without a car?
Yes, it’s possible to get car insurance without owning a car. A non-owner car insurance policy provides liability car insurance if you cause an accident in a car you don’t own. Non-owner insurance is secondary coverage to any car insurance the owner has on their vehicle.
A non-owner car insurance policy is helpful if you regularly rent cars, borrow a friend’s car often or your state requires you to acquire an SR-22. Carrying a non-owner insurance policy can prevent an insurance coverage gap if you’re in between cars.
What should I do if I have non-owner car insurance and I buy a car?
If you buy a car, you’ll need to get a traditional car insurance policy. Non-owner car insurance doesn’t cover you if you own a car.
A good way to start your car insurance shopping journey is to compare car insurance quotes from several companies. Look for a company that offers the coverage you want at a reasonable price and that has a good reputation for customer service. Here are the best car insurance companies.
Does non-owner car insurance cover rental cars?
Non-owner car insurance provides liability coverage, which pays for property damage and injuries to others if you cause a car crash. But it won’t pay for damage to the rental car itself.
If you want coverage for damages to a rental car, you’ll need to consider other options, such as coverage from the car rental agency or your credit card company.
Related: Don’t get ripped off at the car rental counter