Non owner car insurance: who needs it, what it covers and SR-22 filings

What is non owner car insurance?

A standard auto policy is built around a car: it lists the vehicle, and much of the coverage follows that car. A non-owner policy is built around a person instead. It covers you, as a named driver, when you drive a car that is not yours and is not regularly available to you.

The Texas Department of Insurance (TDI) describes it simply: if you don't own a car but often borrow one, a non-owner policy covers injuries and damage you cause to others while driving the borrowed car, but not your own injuries or damage to that car. Michigan's insurance regulator describes the "named non-owner" endorsement in a similar way, as liability coverage for a person who has use of cars owned by someone else.

Who needs non owner car insurance?

It is usually not the right fit if you live with someone whose car you drive regularly. Insurers generally expect you to be listed on that household policy instead, and TDI notes that some companies require everyone of driving age in the household to be on the policy. Non-owner policies can also exclude a car that is available for your regular use, such as one you drive every day, so read the exclusions.

Michigan has a specific rule worth knowing. Its no-fault law treats someone who has the use of a vehicle for more than 30 days, through a lease or otherwise, as an owner, so that person needs a full no-fault policy, not a non-owner endorsement.

What non-owner insurance covers and doesn't

Michigan's regulator notes that its named non-owner endorsement provides only liability coverage and does not meet the state's no-fault requirements, so insurers should tell buyers that clearly. In other no-fault states, ask how the policy handles PIP before you buy.

Because the policy has no collision or comprehensive coverage, damage to a borrowed car is a matter for the owner's collision coverage and for you and the owner to settle. Read what liability insurance covers for more on the core coverage.

How it works with the car owner's policy

Generally, insurance follows the car first. When you borrow a car with the owner's permission, the owner's policy usually pays first, and a non-owner policy pays after the owner's limits are used up. For example, Missouri's program for young people in state care describes its non-owner policy as secondary to the vehicle owner's policy.

Example: you borrow a friend's car and cause a crash that injures another driver, whose medical bills come to $40,000. If the friend's policy has a $25,000 per-person bodily injury limit, it pays $25,000. A non-owner policy with a $50,000 per-person limit could pay the remaining $15,000. Without it, you could be personally responsible for that amount.

The NAIC suggests asking an insurer two questions on this: "Am I covered if I drive someone else's car?" and whether your car is covered when someone outside your home drives it. The answers vary by policy.

Non-owner SR-22 insurance

An SR-22 is a certificate your insurer files with the state to prove you carry liability insurance. States require one after serious violations; New Hampshire, for example, requires one after any DWI conviction and after leaving the scene of an accident. Read the full guide to SR-22 insurance.

If you must file an SR-22 but don't own a car, the filing goes with a non-owner policy. The Oregon DMV calls this an "operator" certificate, used when the person who must file does not own the vehicles covered by the policy, and it says you must file even if you have no vehicle. New Hampshire's DMV makes the same split: an operator SR-22 only lets the person drive, while an owner SR-22 also lets them own and register a car.

If you buy a car while the requirement is still in force, you'll usually need to switch to a standard policy with an owner's certificate. Letting the filing lapse is serious: Oregon's DMV, for example, says it must suspend driving privileges when a required SR-22 is not on file. Some states use a different form, the FR-44, after a DUI; see FR-44 insurance and car insurance after a DUI.

How to buy non-owner car insurance

1. Check that you qualify. Non-owner policies are meant for people who don't own a car and don't have one regularly available at home; the insurer will ask.
2. Choose your limits. At least your state's minimum liability; higher limits give more protection. Check minimums with our state minimums tool.
3. Ask several insurers or an agent. Not every insurer sells non-owner policies. If you need one with an SR-22 and are turned down, ask about your state's high-risk plan; see high risk auto insurance.
4. Ask about extras. Find out whether uninsured motorist, medical payments or PIP are included or required in your state.
5. Ask the insurer to file your SR-22 or FR-44 if you need one, and confirm with the DMV that it was received.
6. Keep it in force. Pay on time and renew before it expires so your history stays continuous.

How much does non owner car insurance cost?

There is no reliable national figure for non-owner policies. They often cost less than a standard policy for the same driver, because there is no car to insure and no collision or comprehensive coverage. Your driving record still matters a great deal: a driver who needs an SR-22 after a DUI usually pays more than a driver with a clean record who simply wants continuous coverage. Compare quotes for the same limits. The national average for all car insurance was $1,281 a year per insured vehicle in 2023, but that figure includes collision and comprehensive.

Non-owner insurance and rental cars

Does your insurance cover a rental car? If you own a car, your own policy may extend to rentals; if you don't, a non-owner policy may give you liability coverage when you rent, depending on its terms. It will not pay for damage to the rental car itself, so you would still need to decide about the rental company's damage waiver or a credit card benefit. Ask your insurer exactly how your policy treats rentals before you travel.