While it’s natural to assume that car insurance is only available and necessary for those who own a car, that’s not actually the case. There are also car insurance policies designed for those who don’t own a vehicle. But why would you need such a policy? This specialized form of insurance can provide valuable financial protection when driving a vehicle you don’t own. Bankrate’s insurance editorial team explains what non-owner car insurance is and how it works so you can decide if it’s right for you.

What is non-owner car insurance?

Non-owner car insurance offers insurance coverage to people who do not own a vehicle, do not have regular access to a car and have a valid driver’s license. To put it simply, non-owner car insurance is liability insurance for people who occasionally drive, but do not have a car registered under their name.

Non-owner insurance covers others’ injuries and any damage to their property while you are driving a vehicle that you do not own. This coverage can be purchased for a number of reasons, ranging from frequent car rentals to borrowing a car.

Before we go any further and begin examining the best non-owner car insurance, there are a couple of unique things to note about this type of insurance. The first is that non-owner insurance is not appropriate for drivers who live with the owner of the car that they are driving. In that case, you will need to be added to the primary driver’s insurance policy.

Second, this type of insurance does not cover the damage done to the vehicle that you are driving. For that reason, it is almost always less expensive than a typical car insurance policy, but you are responsible for the repair costs if you are involved in an accident while driving a car you do not own.

When do you need non-owners car insurance?

Although having car insurance when you do not own a car may not seem necessary to you, there are circumstances where it may be a good idea.

You frequently borrow or rent cars

If you sometimes drive someone else’s car, non-owner car insurance might come in handy. If you are in an at-fault accident using your friend’s car, and you exceed the limit of their insurance policy, non-owner insurance would help you pay for any damages you still owe. However, if you live with the person whose car you often use, you will have to be added to their policy.

You need an SR-22/FR-44

If you are seeking reinstatement of your driver’s license after suspension, an SR-22 – or FR-44 if you’re in Florida or Virginia – may be required. An SR-22/FR-44 is a form certifying that you have your state’s minimum liability coverage. It is important to note that even though you may hear it referred to as “SR-22 insurance,” an SR-22 is not an insurance policy. You must have an insurance policy to obtain an SR-22 or FR-44. The SR-22/FR-44 is what you need to prove you have gotten the auto insurance coverage that is required in your state to get your license reinstated.

If you do not own a vehicle and find yourself requiring an SR-22 or a FR-44, a non-owner insurance policy is what you will need to meet your insurance needs.

You are between vehicles and want to avoid a lapse in coverage

Having lapses in your insurance is a red-flag that inspires rate hikes among insurers. To keep rates lower over the long term, sometimes it makes sense to get a non-owners policy to avoid a lapse in coverage while you are shopping for a vehicle.

How to get non-owner car insurance

There are a few steps you can take to find the best non-owner car insurance for you:

• Find the right company. Most insurance companies do not advertise that they have non-owners insurance. Some companies do not offer non-owner insurance at all.

• Obtain a quote. Some insurers will not issue a non-owner insurance policy over the phone or online, so you may have to get it in person with a broker or an agent.

These companies offer non-owner insurance over the phone.

After you receive quotes, be sure to carefully compare coverage and pricing options to find the best fit for you.

Cost of non-owner insurance

The cost of non-owner car insurance varies based on a number of different factors. Some, but not all, are marital status, credit score (in some states), age, location and driving record.

With standard auto insurance, those factors plus the value of the car insured are considered. With non-owner car insurance, there is no specific vehicle insured, so the insurance company sets your rate by their estimate of how likely you are to cause an accident and use those factors to help determine the risk level.

Frequently asked questions

• • Do I need non-owner insurance if I am borrowing a car from a family member?

    If you find you are frequently borrowing the vehicle, or borrowing it for an extended period of time, you might want to add non-owner coverage. It will help protect you in case of an accident by adding liability coverage, personal injury protection and uninsured motorist coverage.

    It is important to remember though, that if you are in an accident in your family member’s car, a resulting insurance claim may cause their car insurance rates to increase. You would also need to be prepared to cover any excess costs not covered by their insurance policy.

    If you live with the family member, you should be added to their policy as a driver.

  • Can I rent a car with non-owners insurance?

    Yes. In fact, if you are someone who rents cars frequently, having non-owners car insurance can be a smart move that saves you money. That’s because car rental agencies often require you to pay for liability insurance when renting a vehicle, which can be an expensive add-on. But if you have non-owners insurance, you won’t need to pay the car rental company’s additional fee. Keep in mind that you may still need to purchase separate rental car insurance to cover the cost of damage to the vehicle, though.

  • My company issues me a company car. Does that mean I should get non-owners insurance?

    No. Company cars are usually exempt from non-owner insurance. Though it never hurts to ask to be sure, usually, a company vehicle policy covers the car when it’s used for business. If you use the company car all the time, you should add a drive other car endorsement to further protect you in case of accidents.

  • While driving a friend’s car, I got into an accident and totaled it. Does non-owners insurance cover the damage to his car?

    No, but their car insurance might (assuming they have collision and comprehensive). Non-owner insurance doesn’t provide collision or comprehensive coverage. However, it will help if your friend’s policy is maxed out and the other car is damaged and/or the other party was injured.

  • What are some things non-owner insurance does not cover?

    While non-owner car insurance can be helpful in providing liability coverage if you cause an accident, its benefits often end there. For instance, non-owner insurance does not offer collision or comprehensive coverage—meaning it will not cover the costs of damage to the vehicle you are driving. It also does not pay the costs to have your car towed or provide coverage for any drivers other than yourself.