Nonowner car insurance protects you if you regularly drive a car that you don’t own, typically with minimal coverage like liability. Most companies want you to prove your interest in insuring the car, and you’ll need to find a company that’s willing to offer this policy.
How to get car insurance without a car
If you’re having trouble getting a nonowner car insurance policy with your current insurer, you have a couple of options:
1. Prove that you need the car.
Some car insurers will bypass their own rules if they see your definite need for a car. You can explain that you need the car to commute work, drive your children to school or run errands because there’s no public transportation available.
If you live in a state where your name isn’t required on the registration, convince the insurance agent that you have a financial stake in the car. Be honest about your current situation and explain why you can’t own a car but need to drive one.
2. Shop around for the right car insurance.
A few insurers will write you an insurance policy even if other companies refuse to cover you. If one company denies you, ask for specific reasons why to help you improve your case for that insurer or another one.
3. Add your name to the car title.
In some states, your name must be on the car’s title to insure the car. You’ll either need to add your name to the title, making you an owner of the vehicle, or you may need to find an alternative way to get around.
Beware that fully transferring the title to your name comes with high taxes. If the owner gifts you the car, you could avoid those taxes, but consult a tax professional to understand any tax changes before transferring.
How to apply for nonowner car insurance
Applying for nonowners car insurance is straightforward once you secure an insurer that will write the policy.
- Call your chosen or current insurer and inform the agent that you need a nonowners policy.
- Give the agent your information and let them know whether you need an SR-22. Your company may file the SR-22 directly with your state.
- Confirm coverage and set up your payments.
- Wait for proof of insurance and keep it with you.
Compare car insurance coverage
How much is nonowner car insurance?
Since nonowner car insurance includes similar coverage to a liability-only policy, you can expect to pay well under $1,000 a year for this insurance.
If you don’t need medical payments or underinsured driver coverage, you also could save several hundred dollars. However, your exact rates will look different from other drivers, possibly relying on factors about your driving rather than the car itself.
Your age, address and driving history may influence your rates the most. Expect higher rates than the average $1,300 a year if you’re under age 25, live in a high-traffic area or have past accidents or violations.
What does nonowner car insurance cover?
Nonowner auto insurance typically protects you with liability coverage, but it doesn’t offer optional coverage like damage to the car or rental reimbursement.
Protection against the car’s damage needs protection under the car owner’s policy with collision or comprehensive coverage. It typically doesn’t cover other drivers like your spouse or teenager either.
If you get in an accident, the car owner’s policy pays out first. Then, your nonowner policy kicks in for liability damage the owner’s policy won’t pay, like injuries to other drivers.
When do I need nonowners insurance?
Nonowner car insurance can provide you with some flexibility in which cars you borrow or rent, while keeping you protected for a lower monthly cost than standard car insurance. You might want this policy:
While driving someone else’s car
You may be driving someone else’s car enough to get nonowner car insurance if:
- You take your parents’ car when you move for school.
- You live away from your parents but regularly borrow their car and park it at your home.
However, if you live with a person and aren’t listed on their insurance policy, your roommate or family member may have their claims denied for damage that happens while you’re driving.
If you have an SR-22
This certificate states that you are carrying the state’s minimum liability insurance if you’ve gotten into trouble and require it. This is not considered insurance but provides documentation that you have liability.
However, not every company allows you to file an SR-22. You might be required to obtain nonowners insurance if you intend to drive, even if you don’t have a car.
While renting cars regularly
A nonowners policy can work well if you regularly rent cars for business or travel adventures. It also can help if you rent through car-sharing sites like ZipCar, filling in insurance gaps that the company doesn’t provide.
However, stay up front with your insurer about how you use your policy since driving long distances could raise your insurance risk, and make sure driving rental cars isn’t excluded.
If you don’t rent all that often, consider a temporary car insurance policy that covers you by the month or day.
Between vehicle ownership
If you’re applying for a driver’s license, some states require proof of financial responsibility even if you don’t own a car.
So, even if you don’t plan on driving for a period of time, you might want nonowners insurance to avoid a gap in your insurance coverage.
What is insurable interest?
Typically, if you own something — in this case, a car — you’re considered to have insurable interest in that item, giving you a stake in what happens to the car. If the car were to be damaged, totaled or stolen, you would suffer financial loss.
Most insurance companies won’t insure your car if you cannot prove insurable interest, which can be difficult if you aren’t the owner.
Why is it hard to insure a car that I don’t own?
If you don’t have insurable interest, then it’s hard for insurance companies to outweigh the risk of insuring someone who doesn’t own the car. The person driving the car could easily just damage the car themselves if the owner ever gets on their bad side.
And to take it even further, if insurance companies were willing to insure cars that an individual didn’t own, then what would stop someone with a bad driving record to ask their friend to insure their car for them, in order to get a lower rate. This can easily get car insurance companies into very tricky territory.
Who makes the car insurance payment?
If you’re able to convince the owner of the car to add you to their insurance policy, this doesn’t mean they have to make the payment each month.
Make the monthly insurance payment for the owner of the car yourself. You can even set up automatic recurring payments.
While you might find a way to get insurance for a car that you don’t own, it might be difficult to find the optimal solution for you and the car owner. The key is to prove to insurance companies that you need to use the car and you have to be the one to set up the insurance.
Compare all car insurance companies to find the right one for your situation.