It’s well-established that car insurance follows the car. That’s what makes it possible for the auto insurance company to pay for claims when another authorized driver crashes your car. But is it possible to obtain auto insurance without owning a car in the first place?
Well, non-owner auto insurance is a type of coverage that follows the driver. It offers protection for cars that you may drive but don’t own, for instance, if you frequently rent out cars. Learn more about how non-owner auto insurance works:
Non-Owner Car Insurance if You Already Own a Car
In most cases, non-owner car insurance is not a separate cover that you can purchase from an insurance company. It’s rather an endorsement added to an existing personal car insurance policy. How does this work out?
If you have a vehicle at home but often prefer rentals, it may be worthwhile to have a non-owner insurance cover. That’s because the rental company will often require you to pay for Collision Damage Waiver/Loss Damage Waiver. It typically protects you from any losses from theft or damage to the rental but does not often include bodily harm. You may also feel the need to pay for Roadside assistance cover for protection against costs involving key lockout or towing.
By adding a non-owner vehicle endorsement cover, you may reduce the costly charges associated with Collision Damage Waivers. The rental vehicle will likely be covered by third-party liability coverage.
Non-Owner Insurance Covers When Renting a Car
There are other non-owner insurance covers as well. You can purchase collision damage insurance and roadside assistance separately even before renting the car. Because these do not offer protection for bodily harm, you may also need to obtain personal accident insurance (PAI) separately.
It offers protection to you and your passengers in case of an accident. The insurance company will pay for any medical costs, emergency care, or compensation for accidental death. Always check the maximum limit the insurance company offers for the cover, along with exceptions and instructions to file claims. For instance, the PAI cover may be considered void if the accident resulted from driving the vehicle under the influence.
Where Can I Find the Best Rates for Non-Owners Car Insurance?
Just like regular insurance, you need to shop around for the best rates for non-owners car insurance. Remember that not all companies offer these products. You can consult insurance experts for leads. An insurance marketplace like Surex may be the best place to start for added convenience.
Driving a Friend’s Car and Not a Rental
According to the Insurance Bureau of Canada, someone can lend their vehicle to you without having to name you on their insurance policy. But this has to be a one-time use. You’ll be covered under their policy. However, if you often borrow a car, you need to be listed in the insurance policy as an occasional driver. For instance, if you borrow a friend’s car every Thursday to go to the gym, this is a case of occasional use, and you must be included in the insurance policy.
For the insurance policy to be in effect, the car owner must have given their explicit permission either in writing or verbally. What’s more, if you borrow the car, you must have an active and valid driving license in the province where you both live. But note that there may be exceptions to this rule. In British Columbia, where the preliminary insurer is the government-run ICBC, the policyholder may face a one-time financial penalty when an unlisted driver is in an accident. They can avoid this by also getting unlisted driver protection as part of their plan.
Non-Owner Insurance Coverage for an Underinsured Car
A case may arise where the car owner has a standard insurance policy that includes accident benefits and third-party liability coverage of $200,000. You may feel that you need more protection for third-party claims, damage to the vehicle, and personal bodily harm. Is it possible to extend coverage on the car that you don’t own?
For this peculiar case, it’s best to speak to the insurance company directly. You can first check if they offer rental vehicle coverage and inquire about non-owner insurance coverage for a car that’s already covered. But such plans are often complex to set up, and the insurance company may turn this offer down as it’s not as common. You may also discover that the costs of getting a separate insurance policy may be too high. If you regularly use another person’s car, you may consider the possibility of enhancing their policy and becoming a listed driver.
Who Needs Non-Owner Auto Insurance?
Simply driving someone’s car occasionally or once in a while does not necessarily mean that you require non-owner insurance. You may need this insurance if:
- You regularly use car-sharing services
This is a type of rental service where you borrow a car for a short duration, for instance, several hours. It’s often cheaper than a dedicated rental service. The car owner will likely manage the main insurance coverage for all users, but you may also consider getting additional coverage using products such as Personal Accident Insurance.
- You frequently use another person’s car and need extra protection
For this usage case, it’s important that they add you as a listed driver. Any additional non-owner insurance can offer added protection against bodily harm or property damage.
- You are a regular rental driver
You can work with an insurance company to customize a plan that will cover you for rental cars. It may mean saving up on insurance fees charged by the rental company.
- You want to maintain continuous coverage after selling your car
If you want to maintain your auto insurance discounts and track record after selling off your vehicle, you can also consider paying for the non-owners insurance. You prevent your insurance from lapsing and it still provides additional coverage when driving borrowed cars. But if you’re going to go for long stretches without a car, you may save more money by not purchasing the non-owners insurance policy.
Non-owners car insurance serves four main purposes. It provides added protection if you regularly drive vehicles that you don’t own including rentals. It’s beneficial if you also use car-sharing services or want to maintain continuous coverage and avoid lapses.
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