It's becoming more common to give up your car, especially if you live in a city with good public transit / car-sharing options. So you may think, "If I don't own a car, I don't need auto insurance, right?" Well, part of that is true. You don't need a full-coverage auto policy. But you should have a Named Non-Owner Auto Policy. In short, this policy offers bodily injury liability, property damage liability, and uninsured / underinsured motorist coverage. If you ever rent a car or moving truck, borrow a car, ride in an Uber/Lyft, use ZipCar or Car2Go, or ride a bicycle, you may need a Named Non-Owner Auto Policy.
How much does it cost? That really depends on where you live, how often you drive, your driving history and your insurance claims history. You can expect a non-owner policy to be considerably less than an owner policy, typically between $300-600 a year for a driver with a clean record. If you bundle home, condo, or renters insurance, you can save more money.
What does a named non-owner policy cover?
1) Bodily injury and property damage liability. These coverages pay for bodily injury or property damages you may cause to others. Let's say you borrow or rent a car and cause an accident. Your non-owner policy will cover your liability for injuries and damage you cause. The car owner's insurance will not cover your liabilities.
2) Uninsured motorist bodily injury and property damage coverage. This covers damages caused to you by someone with no auto insurance. Let's say you are riding in a car with no insurance or are hit by an uninsured driver, your uninsured motorist coverage from your non-owner policy would pay for your injuries and loss of property.
3) Underinsured motorist bodily injury and property damage coverage. Similar to uninsured motorist, this covers your losses when the driver at fault doesn't have enough liability coverage. Let's say you are seriously injured in an accident in a friend's car and your friend only carries $15,000 in liability coverage, your underinsured motorist coverage would cover the rest of your injurie
What if I borrow my parents' car or a friend's car, aren't I covered?
If you are not listed as a driver on their policy, you are not covered. You usually have to live in the household to be listed. "But they told me they have full coverage!" That full coverage is for them, not you. If you wreck their car, their insurance will pay to fix their car. However their insurance won't pay for the damage you did to the other car or injuries you caused.
What if I rent a car or moving truck? Your non-owner auto policy will extend to rentals. However, a non-owner policy won't include coverage for damage you cause to the vehicle you are renting. You will either want to purchase collision coverage from the company or your credit card company might offer coverage.
What if I ride in an Uber / Lyft? Ride share companies insure their drivers for damage and injuries that the drivers cause. But what if you open the door of an Uber and it is hit by a car or passing bicycle? If it's your fault, your non-owner policy will cover it. Ride share companies are notorius for denying liability coverage as they aren't regulated by the state insurance commission. If your Uber / Lyft is hit by a driver with little or no insurance, there may be a gap in coverage for you. That's when your uninsured / underinsured motorist coverage steps in.
What if I'm a passenger in someone else car? It's not common to ask the driver how much insurance they have. But if you are injured as a passenger in someone else car, your injuries or the total injuries from the accident might exceed their policy limits. That's when your under insured motorist coverage steps in. This coverage also extends to your children when they are riding in another car.
What if I primarily ride a bike or scooter? At any time you could hit a car, another cyclist, or a pedestrian. Your non-owner auto policy will extend to damage or injuries you cause while riding your bicycle or scooter.
What is not covered? Typically a non-owner policy does not include comprehensive, collision, towing reimbursement, and rental reimbursement. If you are borrowing or renting a car, make sure that car has collision coverage or that you purchase it.
What if I drive a company car? There may be gaps in coverage. If you use the company car for personal errands / personal trips (even if your employer allows that), your company's auto policy likely only covers you while driving for business. The commercial policy usually doesn't cover your liability while driving to and from the office. Make sure you have a non-owner policy or you've included "extended non-owned auto coverage" on your personal auto policy.
What if I don't have a car now, but plan to have one in the near future? You should absolutely have a non-owner policy. When you go to purchase your next car, your insurance company will look for any recent lapses in insurance. They won't care that you didn't own a car during that lapse. You will pay a much higher rate for letting your auto coverage lapse. A non-owner policy is a great way to bridge that period of not owning a car.
Who sells named non-owner auto policies? WE DO! Most major auto insurance companies sell them. CB Chambers offers non-owner policies through Nationwide, Travelers, Allstate, and Progressive.