“Just get a Non-Owner policy,” they tell you, “they cover anything.” It’s just not true. There’s much confusion and misuse of Non-Owner polices because people don't understand them. It would be a terrible thing is for someone to think they have coverage and they do not.
A Non-Owner policy isn’t a policy that covers you for anything you drive; yet that’s what some people think. Instead, it’s a restrictive policy. It was originally designed for people who don’t own a vehicle but are told by the State they need an SR22 to get their driving privileges reinstated. For example: Let’s say you drive a delivery route truck for a snack company. The company normally covers you on their commercial policy but now you don't qualify for their coverage since your license has been suspended or revoked due to a DWI, an accident without insurance, too many points or whatever. You don’t have a valid Driver’s License. The choice is, get your driving privilege reinstated or lose the job. The Non-Owner policy could be part of getting your driving privileges back in good standing as long as you also meet the State’s other requirements.
Here are some quick points about Non-Owner policies:
· They are Excess Liability insurance policies. They provide coverage when an underlying liability policy has reached its limits. Therefore,
they assume there is a current policy (the ‘underlying’ policy) on whatever you’re driving. It is not primary coverage like you would have on
a car you own.
· They are also called Named-Operator insurance policies. They can cover only one person and it’s the person who is named on the policy,
the Named-Insured. There can be only one name.
· They do not cover any vehicle owned by the Named-Insured (if you own a vehicle you are thereby ineligible to get a Non-Owner policy
since it’s for those who do not own a vehicle).
· Non-Owner policies typically have an SR22 attached.
§ This is a form that most insurance companies electronically file to the State requiring it.
§ When an SR22/SR-22/FR-44/Financial Responsibility filing an is needed, the States stipulate that all vehicles titled to the insured are to be listed on it.
§ We call this filing a “tattle-tale” form that keeps the State apprised of your car insurance status (if you don’t keep the insurance, the State is notified). You must keep the insurance to keep the SR22 in force.
A Named Non-Owner policy was designed for people who need to get their driver’s license back but do not own a vehicle. You need to read the fine print. Here’s one insurance company’s verbiage from a Non-Owner policy: “A named Non-Owner policy provides liability protection to an individual who does not own a vehicle or have access to any personal use vehicle on a regular basis.” So, if you borrow a car from a relative or someone in your home, Non-Owner car insurance isn’t the right choice because you should be listed on the car owner’s policy. It’s also not a go to policy for renting cars since it isn’t primary coverage. In most policy jackets (the verbiage going into all the detail about the policy) it will tell you in some shape or form what’s not covered. Typically, you’ll see things like:
· Driving a vehicle kept or garaged at your address
· Driving a vehicle available for your regular or everyday use
· Driving any vehicle owned by you
· Driving a vehicle you don’t own but consider yours
When you have a Non-Owner policy then buy a vehicle, you cannot take your insurance card to the DMV/BMV thinking you have coverage for your vehicle. You must notify the car insurance company or your agent that you need to switch to an owner policy first.
Who needs Non-Owner car insurance?
We’ve already established that if you own a vehicle, a Non-Owner policy isn’t right for you. But who can use a Non-Owner policy? Some of these scenarios are the most common:
· The Courts say you need to show proof of insurance and you do not own a vehicle
· The State tells you to file an SR22/SR-22 (or an FR-44 form in Florida and Virginia), along with any other requirements, to get your driving
privileges/Driver’s License reinstated
· The State tells you to file an SR22/SR-22 (or an FR-44 form in Florida and Virginia), along with any other requirements, to get your
“Hardship License” [Limited Driving Privilege]
· Your state requires insurance to reinstate or get a driver’s license. Some states do so under what is sometimes called a “proof of financial
· You had a vehicle policy, but then got rid of your car (sold it, junked it, etc.). Now you don’t own a car but you’ll be getting another car soon
so you don’t want to lose your continuous auto insurance coverage and longevity discounts. Going without coverage, even when between
vehicles, costs more by impacting these discounts leading to higher rates when you do get a vehicle down the road.
Some final points
Some things you read or people you talk to tell you things like: you can’t get Non-Owner quotes online or that they’re difficult to find or get. They aren’t. Having said that, not all car insurance carriers or agencies sell them, or some only if you’re between cars down like the last scenario above. A full-service insurance agency is a great place to inquire.
Since Non-Owner policies don’t cover vehicles you have regular use of and since they’re excess coverage, we do not recommend them for renting vehicles. If you must rent a car but don’t have insurance, get their insurance for the time that you need it.
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