When is Non-Owner's Insurance a Good Idea?

There are plenty of people in Florida who don’t own cars but still drive on a regular basis, especially for those who choose to rent cars regularly to travel. While car rental companies do offer insurance, it is often quite expensive. Non-owner’s insurance may be a better option for some people.

Cost Comparison

When you rent a car, there are some things that will be covered automatically. Of course, the rental company has a vested interest in its automobile, so they’ll provide comprehensive and collision coverage as well as roadside assistance. However, in order to actually get liability coverage (which is what covers any damage to property or injury to other drivers and their passengers), you’ll be expected to pay a rate of $7 to $14 a day, depending upon the company. On the other hand, a non-owner’s insurance policy will cost you a few hundred dollars per year, which is a great investment for those who rent often.

What It Covers

A non-owner’s insurance policy provides only liability coverage. Therefore, should you choose to borrow a friend’s car and you get into an accident, your friend’s insurance policy will be the first place to go to make a claim. However, since you were the one driving the car, you may be sued if any injuries or property damages sustained exceed the limits of that coverage. As such, a non-owner’s insurance policy affords you some extra coverage in this case so that you won’t have to rely on your friend’s insurance alone. In fact, for most of these policies, there are never any deductibles.

Damages Not Included

A standard non-owner’s insurance policy is not going to cover any of the damages to a rental car (or to a car that you borrow, for that matter) so you should prepare yourself in advance for this. If you are renting your car, you can get what is known as a loss and damage waiver that will protect you in the event that the rental car is stolen or damaged in any way while in your possession. If you are going to be borrowing a car, things can get a bit trickier. Talk to your friend or relative about the coverage they have and then sign an agreement that dictates what will happen in the event that you are involved in an accident that is deemed to be your fault.

Additions for Auxiliary Drivers

If you are on the other side of the fence, (that is, if you will be allowing a friend or family member to regularly borrow your car) it may be in your best interest to add the person who will be borrowing your vehicle to your existing policy as an auxiliary driver. While you will ultimately be financially responsible for this increase in your premiums, you will be better protected if something should happen. This is especially true if you will be loaning your car to a teenage driver in your home; most existing policies will not allow anyone in your household to drive your car unless his or her name is listed on your policy as an authorized driver.

There are some cases in which a non-owner’s insurance policy is the best route, but there are still other options to consider. In general, a non-owner’s policy is best for those who rent frequently or who borrow a car very infrequently since it is inexpensive and affords some additional peace of mind at the same time.