Car Liability Insurance: Everything You Need To Know

If you drive a car but do not own a car, it can make sense to take out motor insurance. That’s because buying traditional auto insurance is unlikely to be the case.

Not every driver owns a car. Some people rent cars when they need one. Others can borrow a set of wheels from a friend or family member. It can help you meet your state’s minimum insurance requirements, protect you from financial loss if you are responsible for an accident, or show proof of insurance.

We explain everything about non-owner car insurance, including what it covers and what it doesn’t, and when you might need it, so you can determine if it is right for you.

What is motor vehicle liability insurance?

Motor vehicle liability insurance offers people who do not own a vehicle but sometimes drive a car, personal injury and property damage. It can be handy if you frequently need to rent cars, borrow other people’s vehicles, use car sharing services, or show proof of insurance to keep your driver’s license.

RELATED STORIES: Do I Need Car Insurance If I Don’t Have a Car?

What does car insurance cover for non-owners

Motor vehicle liability insurance offers you liability insurance in the event of an accident. It can help pay for:

  • Medical expenses for the driver and the occupants of other accident vehicles.
  • Vehicle repairs or other property damage you cause someone else.
  • Legal fees, court fees and damages if someone sues you for causing the accident.

Depending on where you live and the insurer, car insurance can also offer:

  • Uninsured / underinsured motorist insurance (UM / UIM).
  • Medical payments / personal injury protection (MedPay / PIP).

These covers can help you and your passenger pay for the injuries in the event of an accident.

Typically, motor vehicle liability insurance is secondary insurance that begins after the primary insurance for the vehicle is paid for. It can protect you when the main insurance caps are not high enough to cover all of the costs related to the accident.

For example, let’s say you borrow your friend’s car and get into an accident. The personal injury liability limit for your friend’s auto insurance is $ 50,000. However, the driver and passenger of the other vehicle had to pay $ 65,000 in medical bills. Your friend’s policy would pay $ 50,000, and your non-owner policy would cover the additional $ 15,000.

What car insurance does not cover for non-owners

While automobile liability insurance can protect you when you’re driving a vehicle you don’t own, it doesn’t cover everything, including:

  • Damage to your car. The motor vehicle liability insurance does not include any collision or fully comprehensive insurance. So it’s not worth repairing damage to the vehicle you are driving.
  • Your injuries. If you have liability-only insurance, it does not cover any injuries that you or your passengers may suffer. (If your policy includes MedPay or PIP, your injuries may be covered.)
  • Your personal belongings. If you carried a laptop, cell phone, or other personal property in the car, without an owner, car insurance would not cover the cost of repairs or replacements. But your homeowner, tenant, or condo insurance could be.
  • Other drivers. Motor vehicle liability insurance only covers one person. So if someone other than you drives a car that you rent or borrow, your policy won’t cover them.

Is Motor Liability Insurance Right For You?

If you don’t own a car but drive it regularly, car liability insurance can be a good option if:

  • They often rent cars. To drive a rental car, you need liability insurance, which you can purchase from the rental company. However, if you rent cars on a regular basis, it may be cheaper to get a non-owner policy.
  • You must submit an SR-22 or FR-44. If you are required to submit a Form SR-22 or FR-44, you will be required to provide proof of insurance. A non-owner policy can provide the coverage required.
  • You are using a car sharing service. The car sharing company should maintain minimum state liability insurance for its cars. But that is often not enough to cover the costs of a serious accident. Motor vehicle liability insurance can provide additional protection beyond the company’s insurance limits.
  • You want to avoid a coverage gap. If you are not insured, this can lead to an increase in your tariffs. As a result, some people choose to take out owner-less car insurance to avoid a coverage gap. However, David Miller, vice president of The Plexus Groupe, a national insurance broker based in Illinois, says that buying a policy to avoid a loophole is extreme. “You should have paid an extra charge if you should and shouldn’t have had auto insurance, but there’s no reason why someone who lives in Manhattan and doesn’t have a car and need one should get messed up moving to the suburbs [and need to buy insurance]. ”If you have a valid reason not to take out insurance, Miller recommends speaking with a representative to determine if it makes sense to take out a policy to maintain ongoing coverage.
  • They often borrow cars. If you frequently borrow cars from friends or family members, additional coverage can protect you when the main insurance limits are too low.

When should you rethink car insurance for non-owners?

While homeowner auto insurance may be the right choice in some situations, it is not for everyone. It’s probably not for you if:

  • Someone in your house owns a car. If you live with someone who owns a car that you drive, you don’t need car insurance. Instead, you should be listed as a driver on their auto insurance. And depending on the state and insurance company, this may be necessary.
  • You don’t drive often. If you rarely drive a car, it is likely sufficient to get liability insurance from the rental company or to rely on the insurance of your friend or family member. But if you have an accident and the sum insured isn’t enough to cover the cost of the accident, you’re hooked for the rest.

How Much Does Non-Owner Car Insurance Cost?

The cost of car insurance without your own car insurance depends on several factors, including the insurer, your driving history, age, insurance limits, and more. You might think that taking out liability insurance is cheaper than taking out liability insurance through a standard policy because you don’t have a car and you don’t drive a car every day. But that’s not necessarily true.

If you buy a non-owner policy to show proof of insurance because you need to file an SR-22 or FR-44 form, you can expect to pay significantly more than someone with a clean driving report. Forms SR-22 and FR-44 are required for those with the following driving violations:

  • DUI convictions
  • Reckless driving
  • Accidents caused by uninsured drivers

You normally keep paying the increased premium until you no longer need the SR-22 or FR-44.

But even if you have a clean driving report, you can still pay more than you expect. “With car insurance without an owner, you are giving someone car insurance that is not tied to a specific vehicle,” says Miller. “You could drive a Corolla or a Corvette.” Since the insurance company doesn’t know what type of vehicle, where or how far you’re going, it’s difficult to accurately assess the risk. And if there’s uncertainty, Miller says, the insurance company will likely charge more.

What is an SR-22 or FR-44 form?

If you have a serious driving license violation in your file, e.g. For example, a DUI, you may need a Form SR-22 or FR-44 in your state. Your insurance company will submit the form on your behalf to demonstrate that you have at least the minimum insurance amount your state requires.

Where can I get car insurance for non-owners?

Most insurance companies that offer car liability insurance will only give you a quote over the phone. Usually you cannot get a quote or purchase cover online. But not all traditional insurance companies offer this type of coverage, and some only offer it to existing customers. As such, you may have to do a little browsing or work with an agent to find a policy.

Some insurers that can offer car insurance are:

  • Geico
  • District farm
  • Progressive
  • Nationwide

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