Car Insurance If You Don’t Own: Why, When and Where It’s a Good Idea

Last Updated on July 13, 2021

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Yes, there is car insurance if you don’t own a vehicle. This is called, sensibly enough, non-owner car insurance, and it provides liability coverage for injuries and property damage you might cause third parties to whom harm is done while you are driving.

Who Needs Non-Owner Car Insurance?

Non-owner car insurance is particularly helpful for those who rent cars often. Yes, when you get the car the company will offer insurance at the counter, but if you do this often enough, that adds up, and a single policy that attaches to you rather than any of the vehicles can be less expensive.

After all, if you rent a car on vacation you will be driving an unfamiliar vehicle in unfamiliar terrain. The odds of incurring liability are higher than they are at home. So if your livelihood requires such trips, this coverage is important.  

It should be noted that if you have a personal vehicle and car insurance on it, you probably don’t need rental car insurance. You are covered. 

What if you don’t own your car because a family member does? If you are living in a household in which you often drive another household member’s car — a parent, sibling, or spouse, etc. — then the better idea is to obtain coverage on that person’s insurance.  

Borrowing from Car-Sharing Services or Friends

Aside from the frequent traveler who regularly leases cars, in what other circumstances might non-owner car insurance make sense? 

You may regularly use a car-sharing service. Such services (including Zipcar and Turo) do offer a state’s minimum requirements as to insurance. The state minimum will include personal injury protection (PIP) and uninsured/underinsured motorist protection to specified amounts.

But you might decide that the state minimum is too minimum for your needs. Liability in a serious accident can easily exceed the minimum. In such a case it makes sense to supplement what the services offer with non-owner insurance. 

Non-Owner Car Insurance
Do you need car insurance if you don’t own a car? Photo credit:

You might also often borrow cars from friends or work associates. This happens all the time without a lot of deliberation on the part of either friend over contingencies and insurance. Assuming your friend is in compliance with the law, his auto liability will cover you, too, while you are driving the car with his permission.

Again, though, you may decide that you want more coverage than this. If you get into an accident while driving your friend’s car, it may be that the third party requires $35,000 of medical care, and the bodily injury policy on the car is limited to $25,000. In such a case, the injured party can pursue you for the other $10,000. Non-owner policies cover that expense. 

Getting a New License or Restoring a License    

A final reason you may want to get such a policy is that you might need to show proof of financial responsibility, either to get your license to drive for the first time or to get a suspension lifted, where that is the requirement of your state’s laws. 

If you are under suspension, and are seeking to get it lifted, you’ll have to find out whether your state requires what is called an SR-22 form (sometimes an FR-44).  This is a form from an insurer that assures the state’s department of insurance, or the motor vehicle department, that you will be insured for a certain period of time. 

There is no special insurance policy called “SR-44.” That is a name for the required form, not the actual insurance. But since you don’t have to own a car to get a suspension lifted, this may be a circumstance in which you’ll want to purchase a non-owner’s policy and you’ll need to talk to the insurer providing your non-owner’s insurance about providing that form.