Non-owner car insurance is for people who regularly drive cars they don’t own. This includes borrowing someone else’s car, driving rental cars and taking part in car-sharing services. If you have a valid driver’s license and don’t own a vehicle, non-owner car insurance may be a valuable policy to have.
What does a non-owner car insurance policy cover?
A non-owner car insurance policy covers the minimum requirements in your state. In New Jersey, that means liability insurance, personal injury protection (PIP) and uninsured motorist coverage.
Although you can buy more coverage, the minimum car insurance requirements for each coverage in New Jersey are:
- Bodily injury liability insurance: $25,000 per person, $50,000 per accident.
- Property damage liability insurance: $25,000 per accident.
- PIP: $15,000 per person, per accident.
- Uninsured motorist: Matches bodily injury and property damage liability limits.
There is no option for comprehensive or collision coverage under a named non-owner car insurance policy. These coverages will pay for damage to an owned vehicle listed on the policy. Since non-owner car insurance doesn’t cover a named vehicle, there is no physical damage coverage.
Who needs non-owner car insurance?
There are some situations when someone who doesn’t own their own car needs non-owner car insurance.
Keeping continuous coverage
When you go without car insurance — even if it’s because you temporarily don’t own a car — the gap in insurance can cause your rates to be higher when you get another vehicle. Buying a non-owner policy might help keep your car insurance rates low if you only plan to be without a car temporarily.
You regularly rent cars
Whether you’re renting from Hertz or Enterprise or using a service like Turo or Zipcar, it could be a good idea to get non-owner car insurance. Car-sharing and rental companies often offer limited coverage, and if you’re in a serious wreck with damage that exceeds the coverage limit, you could be on the hook for the rest of the damage.
Buying a non-owner car insurance policy can be a cheaper way to supplement the coverage. Since a non-owner policy doesn’t offer physical damage coverage, consider buying it through the company you borrow a car from or using a credit card with this benefit.
You borrow cars from other people
When you borrow someone else’s car, the policy follows the car, not the driver. If you cause an accident while borrowing someone else’s car and they only have state minimum coverage, you could be held financially responsible for the rest of the damage.
Let’s say you hit someone’s brand-new Mercedes and cause $35,000 in property damage. If the policy only covers $25,000 in property damage liability, you might have to pay the remaining $10,000. If you have a named non-owner policy, it could cover that cost.
You need an SR-22
Some states require drivers convicted of serious traffic violations to have a certain level of liability coverage, even if they don’t own a car. When this happens, you’ll be asked for an SR-22, which is a certificate proving you meet your state’s car insurance requirements. There are several reasons you might need an SR-22 in New Jersey, including:
- Being charged with a serious offense like DUI, reckless driving or multiple offenses in a short time.
- Getting caught driving without insurance.
- Failure to provide proof of insurance when pulled over.
- Reinstating your driver’s license after suspension.
- Being involved in an accident without valid insurance.
You could be mandated to provide an SR-22 for up to five years. Your insurance company will fill out the form and submit it to the DMV as proof of insurance. If you don’t own a car, named non-owner car insurance can fulfill that requirement to keep your driver’s license.
Who doesn’t need non-owner car insurance?
In some scenarios, you won’t need non-owner car insurance coverage.
You borrow a car from a household member
If you don’t own a car but borrow one from someone who lives in the same household, they should list you as a driver on their policy. Most insurance companies require all household drivers be listed as a driver, even if they don’t own the car. In this case, there’s no need for non-owner insurance because everyone in the household is covered by the policy.
You don’t plan to own a car or regularly use public transportation
If you don’t plan to ever own a car or regularly take public transport instead of borrowing a car, you probably don’t need non-owner insurance. Neither of these scenarios requires you to have insurance, even if you maintain a current driver’s license.
Keep in mind, though, if you decide to buy a car in the future, you could pay higher rates without current coverage that non-owner car insurance can provide.
You rent a car infrequently
If you only rent a car a few times a year, it might be cheaper to buy the rental firm’s collision damage waiver coverage or use a credit card with this benefit. No matter how infrequently you drive, make sure you have coverage somewhere before you get behind the wheel.
Whether it’s your friend’s policy, rental coverage or a credit card perk, you don’t want to find out you’re not covered after you’ve been pulled over or got into an accident.
How much does non-owner car insurance cost?
The cost of non-owner car insurance depends on several factors, including your New Jersey ZIP code, how much coverage you need and the coverage choices you choose. Other factors that determine the cost of non-owner car insurance are your:
- Driving record.
- Claims history.
Non-owner policy rates are usually much cheaper than a standard car insurance policy with the same coverage, according to Policygenius.
If you have a New Jersey SR-22 requirement, the flaws in your driving record will affect how much you pay for non-owner car insurance. Even without an SR-22 requirement, a ticket, at-fault accident or DUI could cause you to pay more for non-owner insurance than someone with a clean driving record.
Where to buy a non-owner car insurance policy?
Most car insurance companies offer non-owner car insurance policies. If you’re trying to determine where to buy a non-owner car insurance policy in New Jersey, it’s best to call a local agent to get a quote. Most companies won’t offer non-owner insurance quotes online.
Consider getting quotes from the top 10 New Jersey auto insurance companies by market share:
- New Jersey Manufacturers (NJM).
- State Farm.
- Plymouth Rock.
- Liberty Mutual.
Can someone who doesn’t own a car insure it?
When you buy car insurance, the policy usually needs to match the title of the car. If someone who doesn’t own a car tries to insure it, the insurance company can deny the application. To insure a car you don’t own, you must prove you have an insurable interest, which means you’d suffer a financial loss if something happened to the car.
Lenders, for example, have an insurable interest in cars they finance until the loan is paid off. Some insurance companies might allow you to get insurance on a car you don’t own if you list the owner as an additional interest on the policy.
What should I do if I have non-owner car insurance and buy a car?
If you have non-owner car insurance and you buy a car, you need to get a traditional car insurance policy in place before you complete the sale. A named non-owner car insurance policy won’t provide coverage for an owned vehicle. If you use a non-owner policy to buy the car, there won’t be coverage for the car if you get involved in an accident.