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Non Owner Car Insurance: Common Misconception Points About Coverage}

Sunday, June 18th, 2017

Submitted by: Ed Sneineh

Individuals purchase insurance to satisfy specific financial, personal or law related wants. Because people’s needs are different then it can follow that whatever is ideal for someone may not be suitable for another customer. Non owner auto insurance is one of the most misunderstood coverage in the insurance industry.

Non owner auto insurance offers bodily injury and property damage insurance coverage for accidents that caused by the neglectful acts of the insured customer while the he/ she is operating a vehicle that is not owned by that insured person. The coverage obtained is subject to the same State laws that regulate the auto insurance community.

There are few misperception about non owner auto insurance coverages: The following is a list of primary factors regarding non owner policies:

– Non owner auto insurance features additional coverage, not primary insurance, on the vehicle that you operate but you do not own. In other words, the car that you drive must be insured with a primary policy, as well. State rules mandate motor vehicles, not humans, to be insured for liability. Therefore your non owner insurance certificate will insufficient as a proof of liability insurance for a non insured car that you operate.

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– Non owner does not offer any coverage if the operator is operating a commercial auto, or a private passenger car that is used for commercial purposes, such as transporting merchandise for a price.

– Non owner auto insurance offers liability coverage only and, without question, no physical damage (comp & collision.) This can be problematic when an insured with non owner policy (a 20 year old driver, for instance) is using his/her parent’s brand new luxury vehicle where the young operator is not included on the parent’s policy. If the young operator is involved in an auto accident while driving that auto, the parent’s policy may refuse all coverage, and the youthful driver’s non owner policy will only assume the liability part of coverage, resulting in a situation where there may be no physical damage coverage to take care of the parent’s luxury auto.

Non owner auto insurance is not designed to be a substitute for regular auto insurance. If an operator is supposed to be scheduled on a particular policy covering a particular vehicle (a resident of the same household, or one who is provided that car for regular use) then there could be a problem related to the validity of certain coverage in the event of an auto accident while using that car. To overcome potential problems you need to schedule all the operators in the household and all the operators that use the insured vehicle(s) on regular basis.

So what are the purposes of the non owner insurance? Non owner auto insurance is used for certain situations including:

a. Meeting legal requirements. Sometimes the authorities may ask from a licensed driver to have auto insurance coverage to go with certain financial responsibility rules related to maintaining driving privileges. If the person does not have a regular car insurance policy to file with the state then she or he will have to cover that requirement by purchasing a non owner policy. Satisfying state financial responsibility requirement through non owner policy is called ‘non owner sr22 insurance filing.’

b. Additional Protection. When someone has doubts about the adequacy or authenticity of insurance that already exists on autos that the person may be driving then a non owner policy will be of value. Non owner insurance will pay above and beyond what the primary insurance on a particular vehicle pays.

Non owner coverage in commercial settings

As indicated earlier personal non owner provides car insurance coverage similar to the coverages that the Personal Auto Policy provides. Non owner is useless in situations where the vehicle used is a business vehicle or if the accident happens during driving any auto for commercial use (using your relative’s vehicle to deliver pizza for a food establishment.)

A similar notion in commercial insurance exists. The concept is called ‘hired and non owned auto’ which may be obtained as part of the business owner policy or a business auto policy. Hired auto will pay for damages that you, the owner of the business, may create while driving a rented vehicle or “non-owned” vehicle for commercial purposes. Non owned auto refers to paying for damages that you or any of your employees cause while driving any auto that you do not own for commercial purposes (ie you send your employee to make a deposit or to purchase office supply using their own vehicle.) Every business needs to pay attention to these coverages if they are required, because they are optional and extra premium must be paid to get them.

About the Author: Insurance Navy is a Chicago leader of non owner insurance and business insurance. You can get information about

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