How to Buy Non-Owner's Car Insurance

By Nathaniel Miller

Overview

Car insurance can seem like a confusing industry, however in practice it is fairly simple: you have a car and you want to protect that asset, so you buy insurance from a company that offers to pay damages on the vehicle if you invest your money in its company. When you are not the actual owner, but are the main driver of the car, the process does get a bit more confusing. Because the car is not an asset you own personally, you cannot actually purchase insurance on it (that would be considered fraud), however the owner of the car would still want to protect his asset. In this case, non-owner's insurance would need to be purchased on the car to cover anyone driving it.

Step 1

Call insurance agencies for rates on non-owner policies. If the owner of the car has an existing policy for himself, call that agency first to see what kind of rates and discounts that company can offer for a multi-policy car. Remember that non-owner's insurance covers damage and injury to the other driver and the cars involved in the crash and may or may not cover injury to the driver.
Step 2

Ask for insurance quotes based on specifications of the car, the driver's driving record, and other "risk factors." Inquire about the "Assigned Risk Program/Plan," or ARP, offered to the agency by the state, as the company should offer you a policy in accordance with the conditions of this plan. The ARP essentially means that the bad drivers in your state that otherwise could not obtain auto insurance are underwritten by a company under contract with the state government, effectively protecting you in the course of an accident with one of these drivers. Each state's ARP differs based on the number of drivers who need this type of coverage within the state's borders, and the cost to a non-owner's policy premium needs to be outlined clearly in the quote.

Step 3

Pick an economical and viable plan once you have obtained at least 4 to 5 quotes from different agencies. This will allow you to get a feel for what the industry is offering for the car you are trying to cover. According to the Insurance Information Institute, a typical non-owner's policy will cost around $300 a year, with the premium including the liability coverage of the vehicle, any taxes due, and fees from your insurance agency (such as processing or handling fees and ARP fees).
Step 4

Remember to not only look at the monthly premiums but to check how much, or how little, the plan offers in terms of coverage under different conditions. Non-owner's insurance covers damages above and beyond the limits of the car owner's insurance policy and does not normally cover comprehensive, tow reimbursement or rental reimbursement. However, if you crashed into another vehicle and caused $13,000 worth of damage and the owner's insurance only covers $10,000, the non-owner's policy will cover the last $3,000 (normally without a deductible). Also, some non-owner's policies will not cover particular types of vehicles and may only cover a rental vehicle for a period of 15 days or less.

Skill: Easy
Tip: Remember that the owner of the car will also have to purchase a policy for the car if she were to drive the car some too, as the non-owner's insurance only covers other drivers.
Warning:
Do not be hasty in the decision on car insurance. Especially in waning economies, the coverage you pick is what will shield you from disaster in the case of an accident. This is especially important insurance for business owners with company vehicles to have.

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