In scenarios where the owner of the car in an accident is not the driver, who is liable may become confusing. Generally, the driver themselves is liable, but there are cases where the owner’s insurance will cover them. If the driver is listed as a driver on the owner’s auto insurance policy, then it will generally cover damages to the other vehicle and medical costs.
However, if the driver is not listed on the driver’s policy, that policy may deny any claims, leaving the driver on the hook. For people who do not own a car, but sometimes require the use of one, rental agreements usually include the state minimum coverage. However, there is another option.
“For people who only sometimes need to borrow a friend or family member’s car or a rental vehicle, but do not need coverage for their own vehicle, non-owner car insurance is a viable option,” says Jason Barill, attorney at O.E.B. law, “This can help to determine who is liable in an accident, the owner or the driver.”
Most often, non-owner car insurance will cover the driver’s liability in an accident. Some policies may also include uninsured motorist coverage and medical coverage. One thing most do not cover is comprehensive coverage or covering the repairs to the at-fault vehicle.
Generally, non-owner insurance policies cost less than traditional auto-insurance. However, the same factors that insurance companies use for a car owner applying for coverage are used to determine the cost. These factors include a person’s age, gender, driving record, and in some cases, credit score.
Those who would benefit from non-owner car insurance include people who frequently borrow a car, often rent a car, those who are shopping for a new car after selling an old one, and people who drive company cars are those who would benefit from non-owner car insurance. Most of the time, the owner’s policies will cover an accident. However, if the damages exceed policy limits, the non-owner’s insurance will kick in to cover the rest in most cases.
Other people who would need non-owner car insurance are people who have had their license suspended and need proof of insurance to get their license reinstated. Depending on the state, a driver needs to file a form known as an SR-22 or, in some states, FR-44 in order to get their license back. Non-owner insurance is a good way to do this.
Some of the larger auto insurance companies like GEICO, State Farm, the General, Nationwide, and Titan offer non-owner policies nationwide. However, others only offer non-owner policies in certain states. Progressive and Allstate do not offer non-owner policies.
If you are considering a non-owner car insurance policy, it is always best to shop around for the best rate. Those who rent vehicles frequently may find that providing their own non-owner insurance is cheaper than getting the rental agency’s insurance at the counter.
However, always consider your situation before paying for a non-owner policy. If you do not often rent, borrow, or participate in a car-share program, it may not be a necessity.
