Even if you do not own a car, it may still be in your best interest to have a non-owner insurance policy in place.
A non-owner policy provides coverage to drivers that are frequent car renters, borrowers and people who do not drive but need proof of insurance to get their driver’s license reinstated. A license may be revoked for traffic convictions, driving under the influence and driving without insurance among other circumstances. In order to reinstate a license, some states require SR22, a certificate of financial responsibility.
Even if you do not own a car but plan on purchasing one in the future, it is important to have some form of insurance, including non-owners to avoid higher premiums in the future. Insurance companies may see the gaps in coverage and consider a driver to be a higher risk which results in higher premiums.
A non-owners policy is very specific and does not include comprehensive car insurance or collision insurance. It also does not reimburse the policy holder for towing or car rentals and few companies are able to offer medical coverage.
These policies cover body and property liability damages. Body injury liability insurance covers medical costs when you are found at-fault for a collision and a person is injured. Property damage liability covers the repair or complete replacement of damaged property but not the car you are driving.
Because the coverage is more limited, non-owners insurance is typically more affordable than traditional car insurance. People that benefit from these policies are people who frequently borrow and rent cars or use car-sharing services.
Drivers that rely on borrowing cars should invest in a non-owners policy. If you are in a serious collision and the damages exceed the car insurance policy limits, the driver may be held responsible to cover the difference. This is when a non-owner policy is beneficial as it picks up the difference and protects the driver.
It is important to note that children of policy holders may not qualify for this type of insurance. If the person has regular access to insured cars, the person should be added to the policy.
People who frequently rent cars may also find a non-owners policy beneficial. The insurance coverage rental companies offer is often expensive and with a policy of your own, it is one less thing to worry about while renting.
With car share companies like Zipcar and Car2Go, the driver is only required to have a policy with the minimum amount of liability insurance mandated by the state. This is another case in which a non-owner policy can help supplement coverage.
A non-owners policy allows you to use anyone’s car and remained covered. In a worst-case scenario, it is always a good safety net to have in place.