Selling Your Car? Try Non-Owner Car Insurance

Auto Insurance, Insurance
Selling Your Car? Try Non-Owner Car Insurance

Making the move to a car-free life means a welcome end to expensive gas, repairs and maintenance.

But when it comes to car insurance, you shouldn’t rush to drop your coverage entirely. In many situations, it’s wise to stay insured with a non-owner auto policy.

Learn the basics facts about non-owner’s insurance to find out if this coverage is right for you.

What is non-owner insurance?

Even though most owners insure their vehicles, this doesn’t mean you’re covered if you borrow a car. Non-owner auto insurance protects those who drive cars they don’t own by providing liability coverage in case they’re at fault in an accident. These policies are written per person, rather than per car, and cover the policyholder in borrowed vehicles. In addition to liability insurance, some non-owner policies also cover catastrophic car damage, theft and fire.

Be aware that non-owner policies have some limitations. They don’t include collision coverage, and certain work-use situations are excluded. Additionally, this type of policy won’t cover you if you’re driving a vehicle owned by you or a member of your household.

Why purchase non-owner coverage?

Non-owner insurance makes sense if you haven’t given up driving entirely even though you don’t own a car. Whether you have to drive your boss’s truck to run errands, or just occasionally borrow a car from a friend or family member, a single accident could bring financial ruin without liability insurance.

Non-owner insurance also applies to rental cars, so while you’ll still have to purchase the collision damage waiver, you won’t need to buy costly liability insurance each time you rent.

Another important reason to purchase non-owner coverage is to preserve your preferred driver insurance status. A gap in insurance coverage is often viewed as a lack of prior coverage, which may automatically classify you as high-risk. If you go without insurance and later decide to buy a car, you could end up paying high-risk insurance rates even with a perfect driving record.

Depending on where you live, if your driving record is poor and you don’t own a car, you may not have a choice about purchasing this coverage. For example, according to Virginia law, drivers who don’t own cars but would like to have their licenses reinstated after certain serious convictions such as a DUI must carry a non-owner policy.

Is non-owner coverage expensive?

As with all auto policies, premium rates are calculated based on each individual’s driving record. Fortunately, non-owner insurance tends to be very affordable overall. Rates may be as low as $250 for six months or even one year for those with the safest driving histories. A problematic driving record means higher rates, but even those who have to buy the mandated Virginia coverage can expect to pay about $600 for six months.

As long as you still drive occasionally, liability insurance is essential. Luckily, finding a non-owner policy is easy. Almost all insurers offer this coverage, even though it isn’t commonly advertised. Before choosing your policy, let your agent know if you do any driving on the job to find out whether you might need additional coverage. Once you have the proper insurance, you’ll rest easy knowing your liability protection will remain with you no matter what whose car you drive.


Woman in car photo via Shutterstock.