Non-owner car insurance is a type of liability coverage that provides protection for drivers who do not own a vehicle but occasionally drive someone else’s car. It can help pay for the medical expenses and property damage of the other party if you cause an accident while driving a rented or borrowed car.
Non-owner car insurance can also be useful if you need to show proof of insurance to keep your driver’s license or reinstate it after a suspension.
The cost of non-owner car insurance depends on various factors, such as your location, the insurance company you choose, the coverage limits you select, your driving record, your credit history, and your past claims.
In this article, we will explain how these factors affect the price of non-owner car insurance and provide some tips on how to save money on this type of coverage.
Factors Affecting the Cost of Non-Owner Car Insurance
- Location: The state where you live and drive can have a significant impact on the cost of non-owner car insurance. Different states have different minimum liability requirements and different rates of accidents, lawsuits, and uninsured drivers. Generally, the more risky the driving environment is, the higher the premiums will be.
- Insurance Company: The price of non-owner car insurance can vary widely among different insurers. Each company has its own formula for calculating premiums based on various factors, such as age, gender, marital status, occupation, education level, and more. Therefore, it is important to shop around and compare quotes from multiple insurers before buying a policy.
- Coverage Limits: The amount of coverage you choose for your non-owner car insurance policy will also affect the cost. The higher the coverage limits, the more protection you will have in case of an accident, but also the more expensive the policy will be. You should choose a coverage level that meets your state’s minimum requirements and also provides enough protection for your personal assets and financial situation.
- Driving Record: Your driving history is another factor that influences the cost of non-owner car insurance. If you have a clean driving record with no accidents, tickets, or violations, you will likely pay less for your policy than someone who has a poor driving record with multiple infractions. Insurers consider drivers with bad driving records as more likely to cause accidents and file claims, so they charge them higher premiums.
- Credit History: Your credit score can also affect the price of non-owner car insurance. Insurers use credit-based insurance scores to assess your financial responsibility and predict your likelihood of filing claims. A higher credit score indicates that you are more likely to pay your bills on time and less likely to file claims, so you will pay lower premiums. A lower credit score suggests that you are more likely to default on your payments and file claims, so you will pay higher premiums.
- Past Claims: The number and type of claims you have filed in the past can also impact the cost of non-owner car insurance. If you have filed many claims or expensive claims in the past, insurers will consider you as a high-risk driver and charge you more for your policy. If you have filed few or no claims in the past, insurers will consider you as a low-risk driver and charge you less for your policy.
Average Cost of Non-Owner Car Insurance
According to NerdWallet, the average cost of non-owner car insurance in 2021 was $474 per year or $40 per month.
However, this is just an estimate based on national averages and may not reflect the actual price you will pay for your policy.
The actual cost of non-owner car insurance will depend on your personal factors and the insurer you choose.
How to Save Money on Non-Owner Car Insurance?
There are several ways to reduce the cost of non-owner car insurance and save money on your policy. Here are some tips to help you lower your premiums:
Compare Quotes from Multiple Insurers
As mentioned earlier, different insurers have different rates for non-owner car insurance based on their own criteria and calculations. Therefore, it is essential to shop around and compare quotes from at least three to five insurers before buying a policy. You can use online tools or agents to help you find and compare quotes from various companies.
Consider Higher Deductibles
A deductible is the amount of money you have to pay out of pocket before your insurer pays for a claim. A higher deductible means that you will pay more upfront in case of an accident, but it also means that you will pay less for your monthly or annual premiums. A lower deductible means that you will pay less upfront in case of an accident, but it also means that you will pay more for your monthly or annual premiums. You should choose a deductible that suits your budget and risk tolerance.
Maintain a Good Driving Record
One of the best ways to save money on non-owner car insurance is to avoid accidents, tickets, and violations that can increase your premiums. You should drive safely and responsibly, follow traffic rules and regulations, and avoid distractions while driving. You should also check your driving record periodically and correct any errors or inaccuracies that may affect your premiums.
Bundle Insurance Policies
If you have other types of insurance, such as renters, homeowners, or life insurance, you may be able to save money on non-owner car insurance by bundling them with the same insurer. Many insurers offer discounts for customers who buy multiple policies from them, as this shows loyalty and reduces administrative costs. You should ask your insurer about the availability and amount of bundling discounts and compare them with the savings you can get from buying separate policies from different insurers.
Take Advantage of Discounts
Another way to save money on non-owner car insurance is to take advantage of discounts that insurers offer for various reasons, such as being a good student, having a good credit score, taking a defensive driving course, being a member of certain organizations, or paying your premiums in full or electronically. You should ask your insurer about the eligibility and availability of discounts and apply for them if you qualify.
Non-owner car insurance is a useful and affordable type of coverage for drivers who do not own a vehicle but occasionally drive someone else’s car. It can help pay for the medical expenses and property damage of the other party if you cause an accident while driving a rented or borrowed car.
It can also help you keep or reinstate your driver’s license if you need to show proof of insurance. The cost of non-owner car insurance depends on various factors, such as your location, the insurance company you choose, the coverage limits you select, your driving record, your credit history, and your past claims.
You can save money on non-owner car insurance by comparing quotes from multiple insurers, considering higher deductibles, maintaining a good driving record, bundling insurance policies, and taking advantage of discounts.
