Jim doesn’t have a car, but his girlfriend, Melanie, lets him borrow hers whenever he needs it. One night, while Jim is driving Melanie’s car, he becomes a bit drowsy and accidentally drives into oncoming traffic, causing a four-car pileup. Two of the other cars are totaled, and four people, with serious injuries, are transported to the hospital. Fortunately, Melanie’s car insurance policy covers Jim, right? Well, sort of.
You see, Melanie had decided to save money by buying the minimum amount of coverage required by her state. The liability damages of the accident greatly exceeded what her policy will cover. Guess who’s responsible for making up the difference?
This is just one example of a situation where someone who does not own a vehicle would have benefited from carrying a non-owner car insurance policy. If you are among the millions of licensed drivers in this country who do not own a car, you may want to talk to an independent insurance agent to learn more about your options for coverage during the times that you are driving. Let Portsmouth Atlantic Insurance advise you about whether non-owner car insurance is right for you.
Who Buys Non-Owner Car Insurance?
A non-owner car insurance policy is designed for licensees who do not own a vehicle but still may require liability insurance for a number of reasons:
Vehicle Owners and Non-Owners in the U.S.
According to the U.S. Office of Highway Policy Information, the number of licensed drivers in the U.S dramatically increased from 163 million in 1988 to over 210 million in 2010. According to the U. S. Department of Transportation, about 8% of licensed drivers do not own a vehicle.
Households with an annual income of less than $25,000 are nine times more likely not to own a vehicle than households with income of more than $25,000. Households residing in rental properties are six times more likely to be no-vehicle households compared with non-renters. This applies also to households renting condos or apartments. Additionally, 19% of single-person households have no vehicles compared with only 4% of multi-person households.
Non-owner policy coverages
The most apparent difference between a non-owner car insurance policy and the usual personal auto policy is that a non-owner policy is primarily third-party coverage, whereas the personal auto policy provides first-party and third-party coverage. Also, non-owner car insurance provides coverage for the named insured only, and no other drivers can be listed on the policy.
A non-owner insurance policy does not provide physical damage coverage, also known as comprehensive and collision. Non-owner car insurance does not cover damage to any vehicle. It provides liability coverage for the named insured (you) if you are in an at-fault accident. It can also cover you for injuries caused by an uninsured or underinsured driver if you select this coverage.
Who Should Not Buy Non-Owner Car Insurance?
There are times when a non-owner auto insurance policy may seem reasonable, but in reality, it’s not, as in these cases:
When Is a Certificate of Financial Responsibility Needed?
Most states require licensees with suspended licenses due to uninsured accidents, DUI/DWI convictions or other offenses to file a certificate of financial responsibility (SR-22) as proof of insurance in order to reinstate their driving privileges. If this is a requirement for you and you don’t own a vehicle, a non-owners auto insurance policy is the way to get this resolved. When you purchase your policy, your insurance carrier sends the SR-22 form to the state where you were licensed so the reinstatement process can begin. It’s important to note that the SR-22 form does not affect your insurance rates, but your reason for needing it certainly will.
For licensees in the U.S. who do not own a vehicle but are concerned about liability protection when driving non-owned vehicles, the solution is a non-owners insurance policy with sufficient limits to meet their needs.
Where to Find Non-Owners Insurance
Give us a call at 603-431-4020 or email us at email@example.com. Our agents have access to a number of insurance companies and will be able to shop around for multiple quotes to deliver an insurance package that meets your individual needs and budget.