What Is A Non-owner Insurance Policy?

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Discussing the subject of insurance could be confusing, so it’s no surprise that most people find it challenging to comprehend relevant information about this topic.

Yet, it’s still critical for us to have an open conversation on the role and kinds of insurance policies as it talks about our money and affects our livelihood.

What’s a non-owner insurance policy?

The non-owner insurance refers to the liability policy dedicated to individuals who need to drive once in a while but don’t have their own car.

If you have ever rented or borrowed a car before, you must be familiar with filing an SR-22. Yet since this is an expensive option, most would typically opt for a non-owner insurance policy to avail an auto insurance liability coverage.

If you’d look at it closely, you’ll find out that this option is 5-15% relatively cheaper than a standard policy.

Of course, not everyone thinks this is the ideal choice for them, especially if they are required to sign up for their car’s primary policy or to cohabit with a vehicle owner.

However, non-owner insurance allows coverage to property damage and bodily injuries if you’ve been in an accident while you were driving someone else’s car. This involves when you were found at fault when your vehicle clashed with another driver, where you’ll be protected from potential lawsuits. 

What does it cover?

The non-owner insurance covers a variety of issues, such as:

Underinsured/uninsured motorist protection

This pays out for your behalf when you’re injured from an accident where the driver is recognized liable but without sufficient liability insurance.

Personal injury protection

It pays your medical payments, which resulted from sustaining injuries from the collision incident you’ve been through regardless if you’re the one at fault or not.

On the other hand, it’s worth noting that this policy doesn’t cover comprehensive or collision insurance.

If you’re using a standard auto insurance policy, then it’s likely that the insurance would have payments for replacements or repairs of the car you own in the coverage. But in non-owner insurance, there’s a guarantee that there won’t be any deductibles.

How it works

The policy could be purchased on a per-person basis, meaning that your spouse or other individuals related to you wouldn’t be covered. Only the person who had availed of this insurance is solely protected.

Since it doesn’t deliver you any deductibles, you don’t have to pay any money before the coverage kicks in. The reason is that this type of policy is considered secondary coverage, which meant that it would be used once it was deemed that the driver’s primary car insurance isn’t enough to pay for the damages.

Let’s say that you got into a road accident when you borrowed a friend’s vehicle. Suppose your friend has a $25,000 limit on their policy regarding property damage liability, and you caused the total damages to jump to $42,000. In that case, you’ll be responsible for paying the excess amount of $17,000.

Now, given that you purchased the non-owner insurance, the damages incurred would be covered by the policy. Yet know that this is only applicable if it included roughly $40,000 in the total of property damage liability coverage.

As long as your friend’s insurance’s limit is more significant than your non-owner policy, then you could expect that the costs would be charged to the primary policy. In comparison, yours would only be utilized when necessary.

Whether you’re a careful driver or not, purchasing car insurance is essential to ensure that you won’t see yourself in debt and protect yourself from going into jail.