Can You Have Car Insurance Without a Car?

Usually, you need car insurance for a vehicle that you own. But what about cars that you don’t own? Like rented or borrowed cars. It is a legal requirement to have proof of car insurance to drive a car across the U.S., even if you don’t own the vehicle. 

So, how do you comply with the law and stay financially covered? If you have these questions in mind, there’s a special car insurance coverage called non-owner that’s designed to cover drivers who don’t own a car.

What is Non-Owner Car Insurance and How Does it Work?

Non-owner car insurance is a specialized auto insurance coverage that’s designed to financially cover your liability costs for at-fault car accidents. It specifically covers the medical bills and any repair/replacement expenses incurred by the other driver or any other person harmed due to a car accident that you’re responsible for. 

It won’t cover your medical bills or the repair expenses of the car that you were driving, especially because it only protects you against liability costs. As you’re legally responsible for injuries or property damage you cause to others, and since minimum liability coverage is mandatory in most U.S. states, insurers recognize an insurable interest in covering those liability costs, even if you don’t own the car. 

Whether you’re exploring standard auto insurance or specialized coverage like non-owner car insurance, it is essential to get adequate coverage from a reliable insurance provider.

When Can You Get Non-Owner Car Insurance?

You may need non-owner car insurance if you want liability protection while driving a vehicle you don’t own. Since this type of coverage applies only to at-fault accidents, it’s important to understand the specific situations where non-owner car insurance is necessary to cover essential car insurance requirements.  

Here are some common circumstances where non-owner car insurance may be a suitable option.

You Often Borrow or Drive Someone Else’s Car

If you frequently drive your spouse’s or friend’s car, even with their permission you can still be held legally responsible for injuries or property damage you cause in an accident. In most U.S. states, drivers must be able to show proof of insurance or financial responsibility when operating a vehicle. 

While the vehicle owner’s auto insurance policy typically applies first under permissive use, having non-owner car insurance can provide additional liability protection. It may help cover costs if the owner’s policy limits are insufficient or if you regularly borrow and drive their vehicle.

You Use a Rented Car

Most car rental companies require proof of insurance to ensure you can cover liability costs if you cause an accident. In many cases, non-owner car insurance can satisfy this liability requirement, since it provides coverage for injuries or property damage you cause to others. 

However, non-owner car insurance does not cover damage to the rental vehicle itself. To protect the rented car, you’ll typically need to purchase a collision damage waiver (CDW) or similar coverage from the rental company. If you frequently rent vehicles, securing appropriate rental car reimbursement coverage is essential for full protection.

You Use Car Sharing Service

If you use a car-sharing service, you’re still driving a vehicle you don’t own, which makes non-owner car insurance potentially relevant. While most car-sharing companies provide some level of liability insurance as part of their service, you can still be held legally responsible for injuries or property damage you cause in an accident. 

In such cases, having non-owner car insurance can offer additional liability protection beyond what the car-sharing service provides, helping you stay financially protected while driving on public roads.

You’re Switching to a New Car

If you’re planning to buy a new car, and your car insurance policy is about to expire soon, it may not make sense to carry a standard auto insurance policy, as you don’t currently own a car. 

However, if you stay uninsured, your car insurance rate can significantly increase due to a policy lapse. In this situation, you can temporarily get non-owner car insurance coverage. 

After purchasing your new car, you can upgrade to an affordable car insurance policy with adequate liability coverage, collision coverage, comprehensive coverage, and other essential coverage in full coverage auto insurance based on your needs and budget.

Your State Requires You to File SR-22 or F44 Forms

If you’re caught driving without insurance or have serious traffic violations on your driving record, a court or state authority may require you to file an SR-22 or FR-44. These certificates serve as proof of financial responsibility, showing that you carry at least the state’s minimum required liability coverage. 

If you don’t own a car but are still required to file an SR-22 or FR-44, non-owner car insurance can be a practical solution. A non-owner policy allows you to meet the state’s insurance requirements and maintain compliance without owning a vehicle.

What Does Non-Owner Car Insurance Cover?

Non-owner car insurance provides essential liability-based coverage designed to protect you financially if you cause an accident while driving a vehicle you don’t own. Depending on your state and insurer, this coverage generally includes the following coverage. 

• Liability coverage: Covers bodily injury and property damage you cause to others in an at-fault accident.   
• Uninsured/Underinsured coverage: Helps cover your expenses if you’re involved in an accident caused by a driver who has inadequate auto liability coverage or none at all.   
• Medical Payments (MedPay) or Personal Injury Protection (PIP) coverage: Both Medpay, and PIP coverage pays your medical bills, while the PIP coverage extends to loss of income, caregiver expenses, childcare costs, and funeral expenses. Although the PIP coverage is available in every no-fault state and a few at-fault states.

What Does Non-Owner Car Insurance Not Cover?

Unlike a standard car insurance policy, non-owner car insurance does not protect the car that you’re driving. So, this means that your non-owner car insurance won’t cover: 

• Damage to the vehicle you’re driving, including collision or comprehensive losses 
• Your personal belongings inside the vehicle 
• Damage to rental cars, which usually requires a collision damage waiver or separate rental coverage 
• Roadside assistance, such as towing or jump-starts 
• Rental car reimbursement, meaning the cost of a replacement vehicle while a car is being repaired

Non-Owner vs Standard Insurance: What’s the Difference?

The main difference between non-owner and standard car insurance is the type of coverage each provides. Non-owner car insurance is primarily limited to liability coverage, with limited medical benefits in some states. 

Standard car insurance, on the other hand, typically includes liability coverage along with optional protections such as collision and comprehensive coverage, which help pay for repair or replacement costs when a vehicle is damaged.  

The table below highlights the key differences between non-owner and standard car insurance.

How Much Does Non-Owner Car Insurance Cost?

It can cost you anywhere from $200 to $1365 per year to get non-owner car insurance in the U.S. The exact rate can vary depending on your location, age, driving records, insurance claims history, and, most importantly, your choice of coverage and its limits.  

According to Forbes Advisor, the average cost of non-owner car insurance is $748 based on rate comparisons from major insurance companies. Now, if you compare it with the standard auto insurance premiums, on average, the minimum liability-only coverage costs $816 per year, whereas full coverage auto insurance costs $2,700 per year.

Is Non-Owner Car Insurance Available in Michigan?

Yes, just like several other states, non-owner car insurance coverage is available in Michigan. If you don’t own a car, but you still drive a car in Michigan, then you’re required to have the following non-owner car insurance coverage. 

• $50,000 in bodily injury liability coverage per person 
• $100,000 in bodily injury liability coverage per accident 
• $10,000 in property damage liability coverage 
• PIP coverage (comes with a selectable limit such as $250,000, $500,000, unlimited, or other permitted options)

How to Get Non-Owner Car Insurance in Michigan?

The process of getting non-owner car insurance in Michigan is easy, and quite straightforward. If you’re interested in purchasing non-owner car insurance in Michigan, here’s what you need to do. 

• Search and list down the top insurance providers that offer non-owner car insurance in your state 
• Contact each of these insurers to know about their non-owner car insurance coverage, and get a quote 
• Compare policies based on liability limits, optional coverages, eligibility requirements, and overall cost. 
• Choose a policy and purchase coverage by completing the application and making the required payment to activate your insurance.

The Bottom Line: Is Non-Owner Car Insurance Enough?

Well, it depends, if you’re acquiring non-owner car insurance for basic financial protection, legal compliance, and to avoid a policy lapse when you don’t own a car, then yes, it should suffice.  

However, if your concern is to get adequate financial coverage then it may not be enough, especially because it does not cover the repair/replacement costs of the car that you’re driving.  

Although this is your best option now, unless you rent a car, in that case you can get a more extensive rental car reimbursement coverage that covers vehicle damage, or you can purchase standard car insurance with adequate coverage after buying a car. 

If you need help deciding whether to get non-owner car insurance, a standard policy, or even non-standard auto insurance for high-risk drivers, contact us now to get a free quote and personalized guide.

Frequently Asked Questions (FAQs)

Do I need the car title to get car insurance?

It depends on the type of car insurance. To get standard car insurance, you typically need to own or lease the vehicle, which means having an insurable interest often shown by being listed on the title, registration, or lease agreement.  

However, you don’t always need the physical title in hand at the time of purchase. If you don’t own a car, you can’t usually get standard auto insurance. In that case, non-owner car insurance is the appropriate option, since it provides liability coverage without requiring vehicle ownership or a car title. 

Is non-owner car insurance required by law?

Generally, non-owner car insurance isn’t required, but you may need it to drive legally, maintain continuous coverage, or meet state requirements such as filing an SR-22 or FR-44. 

Does non-owner car insurance cover vehicle damage?

No, non-owner car insurance does not cover damage to the vehicle you’re driving. It only provides liability coverage for injuries or property damage you cause to others. Any damage to the car itself must be covered by the vehicle owner’s insurance, rental car coverage, or a separate damage waiver. 

Does non-owner car insurance cover my injuries?

Yes, you have the option to include Medical Payments (MedPay) or Personal Injury Protection (PIP), depending on state laws and the policy you choose. Coverage availability varies by state. 

Can I switch from non-owner insurance to standard car insurance later?

Yes, once you purchase a car, you can cancel your non-owner policy and switch to a standard auto insurance policy with coverage options that fit your needs.

Can I file an SR-22 or FR-44 with non-owner car insurance?

Yes, even if you don’t own a car but are required to file an SR-22 or FR-44, a non-owner car insurance policy is usually sufficient, as it typically meets the state’s minimum liability coverage requirements.