Renting a Car Without Car Insurance — A Look at Non-Owner Car Insurance

Strangely enough, renting a car can actually be harder for those without a car of their own.

It all boils down to car insurance. When you rent a car and you already have a car in your driveway, you can use your car’s liability insurance to cover your rental when you’re out on the road. But for those of you without cars of your own, it can be a fiasco to rent a car since you generally don’t have car insurance.

Thankfully though, not all is lost. There are a few different ways that you can rent a car without car insurance of your own while still staying insured on the road — you just need to know where to look.

Here are all the ways you can rent a car without car insurance. We’ll start by looking at buying insurance from the rental company and then dive into the complete guide to non-owner car insurance.

Renting a Car Without Car Insurance

You have a couple of options when renting cars without your own car insurance. Here are the specifics of your options alongside their pros, cons, and other relevant information.

Rental Cars Are (Kind Of) Automatically Insured

Something to note about rental cars: almost all rental cars in the U.S. are required to have liability insurance that covers at least the state minimum. Sounds great, right?

Well, not really.

Rental cars are almost always insured only to the state minimum. And in some states, this is an incredibly low amount.

Take California, for example. The Golden State only requires that cars are insured for $15,00 in bodily injury for 1 person, $30,000 in bodily injury if 2 or more people are involved, and $5,000 in property damage liability. So if you rear-end someone’s brand new BMW, you’re likely going to have to pay out of pocket past the first $5,000 in damages.

Interestingly enough, the state of New Hampshire doesn’t require car insurance for rental cars. So if you rent there, there’s a chance you could be driving a car completely uninsured. Pretty scary stuff.

So with that in mind, we don’t recommend sticking solely to the included insurance. You could be on the hook for a huge bill if you end up in a car accident.

Buying Liability Insurance From the Rental Company

Nearly all rental car companies let you purchase better liability insurance when you pick up your rental car. In most cases, this can be purchased for a daily fee, and the insurance will exceed the state minimums. This will give you peace of mind when driving and ensure that you’re covered if you get in a wreck.

For example, National states that you receive $1 million in coverage when you purchase the company’s supplemental liability insurance package.

This insurance can be expensive, though, and there’s no doubt that it’ll add up over time if you rent cars frequently. Generally, drivers in the U.S. can expect to pay $13-$15 per day for this insurance, but factors like driver age, vehicle type, and more may affect the pricing depending on the rental company.

To make matters worse, you generally can’t purchase liability insurance online. This means that you have to specifically ask for it when you go to pick up the car, leaving you subject to price surprises at the counter.

Call the branch you’re renting from before you make a rental car reservation to ask for a quote. This can save a huge headache in the end.

The only rental car company we can find that does let you buy insurance online is Audi on demand. You can elect to purchase coverage at checkout, and prices may vary from city to city.

For example, we found that insurance is $16.50 per day when renting from Audi on demand’s downtown Brooklyn location, which isn’t too bad given that the company only rents newer Audi vehicles.

Regardless, a daily fee can be pricey when you rent cars frequently or when going on a long road-trip with a rented vehicle. So if you rent cars often and don’t want to pay for insurance daily, consider buying a non-owner car insurance plan.

The Complete Guide to Non-Owner Car Insurance

Non-owner car insurance is exactly what it sounds like: car insurance for people that don’t own a car of his or her own.

As you’d expect, non-owner car insurance covers its customers when driving rented or borrowed vehicles. It’s also a popular option for people that drive fleet vehicles for work but don’t own a personal car with liability insurance.

Non-owner car insurance isn’t the most well-known type of insurance though. According to the U.S. Department of State, 95% of American households own a car, meaning that there’s no reason for most people to purchase non-owner car insurance (or even know what it is).

Who is Eligible For Non-Owner Car Insurance?

Not everyone is eligible for non-owner car insurance.

As you’d expect, you need a driver’s license — but here are 2 other pieces of criteria that you generally need to meet as well: you must not already own a car and you must not have regular access to a car.

These restrictions are likely put in place so that car owners don’t enroll in non-owner insurance for lower car insurance rates. But chances are — since you’re reading this article — these restrictions don’t affect you anyway.

There is no minimum age requirement for non-owner car insurance either. Your age can affect the price of your non-owner car insurance policy’s premium (just like standard car insurance).

How Much You Can Expect to Pay for Non-Owner Car Insurance

You can expect to pay an annual premium when you purchase a non-owner insurance policy — and like any other insurance policy, this can be expensive. Factors like driver age, driving record, and location can impact how much you pay for non-owner insurance policies.

This means the usual woes of car insurance pricing are very much alive in the realm of non-owner car insurance. The younger you are, the more you’ll usually be charged. Regardless, though, non-owner car insurance policies are generally much cheaper than standard car insurance policies because, frankly, they’re used less so you’re less likely to actually claim benefits.

On the bright side, though, our research found that most non-owner car insurance plans don’t have deductibles. This means that you don’t have to pay anything beyond your premium for coverage to kick in – and if your non-owner policy is like most, the insurance company will cover you from day one.

Additionally, since the company can’t determine your premium based on the value of a car, your premium is determined on the likelihood of you causing a crash. So you’re likely to be assessed a low premium if you have a clean driving record and live in a low-cost state for car insurance.

Plus, non-owner car insurance does count as continuous car insurance. This means that your rates may be lower if you eventually buy a car and need car insurance. For reference, not having car insurance for an extended period of time can make your rates more expensive if you decide to buy a car in the future.

So with all of this in mind, you should cover all your bases when deciding if you should purchase a non-owner insurance policy.

You should take a look at how many days a year you actually rent cars. Then, take the average of how much much you pay to buy insurance from the rental car company and compare it to what the insurance company quotes you. If you save money or are close to breaking even, it may be worthwhile to buy a non-owner insurance policy.

What Does Non-Owner Car Insurance Cover?

Non-owner car insurance policies act very similarly to standard car insurance policies when it comes to liability. You’re covered up to a certain dollar amount for the damage that you incur to other drivers’ cars and bodies. Many of these insurance policies cover you up to $1 million in combined coverage.

Generally, a non-owner insurance policy pays out after the vehicle’s primary insurance. This could be the insurance included with a rental car or borrowed vehicle, but it’s always best to check with the rental car company first.

So in practice, you may not need to claim on your non-owner insurance if you have a small fender bender. Instead, you can lean on the rental car’s included insurance. Just make sure to check with your rental car company for specifics on the car’s included insurance first.

On the other hand, your non-owner insurance will pay whatever the owner of a borrowed car’s liability insurance doesn’t cover. So if you borrow a friend’s car and they only have the state minimum for liability insurance, you’re protected if something goes wrong.

The specifics of non-owner car insurance vary from insurance provider to insurance provider. Make sure to ask about things like coverage limits, if the insurance is primary or secondary, and if there are any other perks that your insurance includes like roadside assistance.

What Non-Owner Car Insurance Doesn’t Cover

There are a few things that non-owner car insurance usually doesn’t cover, though. The main thing that it doesn’t cover is damage incurred to or theft of the vehicle that you’re borrowing or renting.

With this in mind, you may want to pay for your rental with a credit card with rental car insurance. Some credit cards offer up to $75,000 in primary coverage, meaning that a total loss of most average rental cars will cost you nothing out of pocket.

Alternatively, you can purchase one of these waivers from the rental car company, but they can be costly depending on where you’re renting. Expect to pay $10 to $15 per day for a damage waiver direct from the rental car company — the cost may vary based on vehicle type and location.

Without a damage waiver, you’ll be stuck paying out of pocket for damage to or theft of the car, so make sure you have some sort of vehicle coverage before you drive. It could save you a huge financial upset if something were to happen to the vehicle you’re renting.

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Where to Buy Non-Owner Car Insurance

Most insurance companies that offer standard car insurance will offer non-owner insurance policies, too. So if you’ve worked with an insurance company in the past, you may want to contact them for a rate.

Unfortunately, we were unable to find a non-owner insurance provider that offered an insurance quote on its website. This means that you have to call the insurance company or visit a brick-and-mortar insurance office for a quote.

This can make shopping around for quotes tough, but you should still shop around for the best possible price. After all, this can save you hundreds of dollars over the years if you plan on keeping your non-owner car insurance for the long-term.

Here’s a quick list of insurance providers that advertise non-owner car insurance policies online:

Each of these insurance companies offers non-owner insurance in all 50 U.S. states, so it’s in your best interest to call all of them and compare quotes.

Geico is also known to offer discounts when you combine non-owner car insurance with homeowner’s insurance or renter’s insurance. So if your home is insured through the company, it may be worth buying non-owner car insurance from them, too.

Final Thoughts

Renting a car without car insurance can be tough, but it’s definitely not impossible.

Whether you choose to pay-as-you-go for insurance or opt to buy an annual non-owner car insurance plan, it’s always worth having extra insurance over the liability insurance included with the rental. As discussed, the included liability insurance is generally only at the state minimum, which can be very low.

We recommend a full-blown non-owner car insurance plan to people that rent cars frequently. This will save you money over purchasing additional liability insurance every time you rent a car and ensures that you can drive without worry whenever you rent.

However, we do not recommend non-owner insurance plans to people that only rent cars 1 or 2 times per year. An annual premium is not likely to save you money in this case, and you’re better off buying liability insurance from the rental car company when you rent.

Regardless, make sure you always pay for rental cars with a credit card that includes a primary vehicle damage waiver. This will protect you from damage to and theft of the vehicle you’re renting and can potentially save you tens of thousands of dollars if something goes wrong during your rental.

And with that: drive safe!