Non Owner Auto Insurance: Common Misconceptions About Coverage
People get insurance to fulfill specific financial, social or law related requirements. Because people's needs are not the same then it can follow that whatever is appropriate for someone may not be ideal for another customer. Non owner auto insurance is one of the most misread coverage in the insurance industry.
Individuals acquire insurance to satisfy certain financial, social or legal needs. Because people's needs are different then it can follow that whatever is suitable for someone may not be acceptable for another person. Non owner auto insurance is one of the most misunderstood coverage in the insurance industry.
Non owner auto insurance presents bodily injury and property damage protection for auto accidents that result from the neglectful acts of the insured individual 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 industry.
There are some gray areas related to non owner car insurance coverages: The following is a list of major points about non owner policies:
- - Non owner auto insurance: provides extra coverage, not primary insurance, on the auto that you operate but you do not titled to you or your spouse. In other words, the auto that you drive must be insured with a primary policy, as well. State guidelines mandate motor vehicles, not humans, to be insured for liability. Therefore the non owner insurance certificate will not be sufficient as an evidence of liability insurance for a non insured vehicle that you operate.
- - Non owner does not offer any coverage if the driver is operating a commercial vehicle, or a private passenger auto that is used for business purposes, such as transporting products for a fee.
- - Non owner auto insurance offers liability coverage only and, without question, no physical damage (comp & collision.) This can be tricky when an insured with non owner policy (a 19 year old driver, for instance) is using his/her parent's brand new expensive car where the young driver is not included on the parent's policy. If the young driver is involved in an car crash while operating that auto, the parent's policy may reject all coverage, and the youthful driver's non owner policy will only assume the liability part of coverage, leading to a situation where there may be no physical damage coverage to take care of the parent's luxury car.
Non owner car insurance is not built to be a substitute for regular car insurance. If an operator is supposed to be scheduled on a specific policy covering a particular vehicle (a resident of the same household, or one who is provided that vehicle for regular use) then there could be an issue related to the authority of certain coverage in the scenario of an auto accident while operating that vehicle. The way to go about this situation is to schedule all the operators in the household and all the drivers that use the insured vehicle(s) on regular basis.
So what are the uses of the non owner insurance? Non owner auto insurance is used for certain situations including:
a. Meeting legal demands. Sometimes the state may require from a person to have car insurance coverage to comply with certain financial responsibility laws related to keeping 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 meet that requirement by buying a non owner policy. Meeting state financial responsibility requirement through non owner policy is called 'non owner sr22 insurance filing.'
b. Self Protection. When someone has doubts about the sufficiency or authenticity of insurance that already exists on vehicles 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 car pays.
Non owner coverage in commercial situations
As indicated earlier personal non owner provides auto insurance coverage similar to the coverages that the Personal Auto Policy provides. Non owner has no use in situations where the vehicle used is a business vehicle or if the accident takes place during driving any auto for business use (driving your relative's vehicle to deliver pizza for a restaurant.)
A similar notion in business insurance exists. The concept is called 'hired and non owned auto' which may be procured as part of the business owner policy or a commercial auto policy. Hired auto will pay for damages that you, the owner of the business, may cause while operating a rented car or "non-owned" vehicle for commercial uses. Non owned auto refers to paying for damages that you or any of your employees cause while operating 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 needed, because they are optional and additional price must be paid to get them.
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