You must understand what non owners auto insurance is before taking the plunge. Of all the car insurance products, this is one that is most misunderstood and has many limitations. It is not true at all that this policy will cover for just about any vehicle you drive. It is also not a comprehensive or collision coverage, but only a third party liability or that which covers for the injury of others and property damage to others up to policy limits.
Non owners auto insurance is specifically designed for people who do not own a vehicle and drive a car owned by someone else. For instance, you commute to work and your boss lets you use his personal car when going about official business transactions occasionally. The insured person is solely covered and adding drivers to a policy is never allowed.
Talking more about the limitations of this policy, it cannot be covered if a vehicle is:
- registered to the policy owner;
- owned by a policyholder even if it is not registered under his name;
- owned by the employer as a business asset and is therefore non-private;
- owned by a resident of your household; or
- loaned to you for use regularly.
Therefore, a non owners auto insurance will only protect you if the vehicle is not classified as any of the above. Moreover, it will only be applied after the existing car insurance coverage for the specific car is already claimed. For instance, a friend lets you borrow his van for a weekend trip and you got into an accident. The collision coverage of the van will first be exhausted up to the policy limits before your non owner coverage will be claimed.
More importantly, after having bought a non owners auto insurance product you also acquired a vehicle, it is necessary to add that immediately after. Of course, there are additional premiums to be shelled out, but it pays to be covered. Some commit the mistake of not adding to the policy and later regret it simply because they thought the car is already included. Remember, an insurer can never predict what happens in your life and therefore will never know you own a new car unless you inform them.
While this is a pretty limited coverage, it still helps ensure that whatever happens you know there is a fallback. If you are one who does not need a personal vehicle yet requires loaning one a few times a year, then think about how this will be beneficial for you.