Non-Owner Car Insurance in Texas
Texas Non-Owned car insurance (also known as Hired and Non-Owned Auto or Non-Owner car insurance) is a supplemental automobile insurance that offers protection to licensed drivers of borrowed or rented automobiles. It provides coverage to the driver against costly injuries and damages to others and their properties by the vehicle in case of an accident. Non-owned car insurance does not protect from the damage done to the borrowed vehicle.
If the car owner does not have insurance to cover the damages or injuries caused, you will pay out-of-pocket. Non-Owned Car Insurance does not pay for the treatment of injuries sustained by the driver or damages to the car in the event of an accident. In Texas, all forms of insurance, including Non-Owned Car Insurance, are under the supervision of the Texas Department of Insurance (TDI).
What is Considered Non-Owner Car Insurance in Texas?
In Texas, Non-Owned Car Insurance is a relatively inexpensive auto insurance plan that provides coverage to individuals driving borrowed or rented vehicles. It provides liability-only coverage for the driver if the car owner does not have a plan that protects the driver against injuries and damages to others in the event of an accident. Apart from providing coverage for individuals, it is also a plan used on a commercial basis by employers to provide coverage for employees in the event of an accident.
Non-Owned Car Insurance plan is available to individuals with a driver's license irrespective of car ownership status.
What is the Point of Non-Owner Car Insurance?
In Texas, the purpose of Non-Owner Car Insurance is to provide insurance coverage for individuals who do not own a car they are driving. Non-Owned Car Insurance covers bodily injuries (BI) and property damages (PD) caused to others while driving borrowed or rented vehicles.
What is Non-Owner Car Insurance for?
Non-Owned Car Insurance offers protection against liabilities that come with injuries and damages in the event of an accident that you caused when driving a vehicle that does not belong to you. It offers you protection against costly injuries and damages to others in an accident resulting from your errors or miscalculations. The plan can also be used as evidence of the ability to pay the bills resulting from liable accidents.
Apart from personal coverage, you can use it to safeguard your business against the inhibitive costs of accidents involving employees.
What are the Types of Non-Owner Car Insurance?
The most common Non-Owned auto insurance types are:
SR-22 Non-Owner Insurance
Commercial Non-Owned Auto Coverage Supplement
Rental Car Insurance (also referred to as Hired and Non-Owned)
Borrowed Non-Owned Auto Insurance
SR-22 Non-Owner Insurance may be required after getting pulled over without an active liability coverage, or having a DIU.
Commercial Non-Owned Auto coverage supplement is purchased by businesses as a rider to the main liability policy, to provide extra protection to the employees, who may need to drive a non-company owned vehicle for business purposes. For example, if a restaurant manager uses one of the other employee’s personal vehicles to go to the bank or to pick up some supplies.
Hired and Non-Owned coverage may be used by those who frequently rent vehicles from car rental companies. Most car rental agencies require that a renter buys automobile insurance that provides minimal coverage for their rental vehicles. If purchased from the rental company, basic liability coverage is billed on a daily rate and it can add up quickly. If the rental company allows Hired and Non-Owned coverage as a substitute - it may be a good way to save money.
Borrowed and Non-Owned coverage is usually purchased by individuals who may borrow other people’s vehicles for personal or business use. By having this coverage, it allows the insured not to worry about what kind of coverage the car’s owner has, and if it will be sufficient to cover any possible damage. Non-Owned car coverage pays the difference.
Do you Need Non-Owner Auto Insurance in Texas?
In Texas, Non-Owned Car Insurance is not compulsory if you can demonstrate your ability to pay for any damages you cause while driving a car that does not belong to you. If you borrow cars infrequently with permission, the cars’ insurance policies can protect you. However, Non-Owned Car Insurance becomes important if you are a regular user of borrowed or rented cars. You need it for protection against expensive liabilities.
Why Do you Need Non-Owner Car Insurance?
In Texas, you need Non-Owned Car Insurance for the following reasons:
To cover liabilities resulting from injuries and damages to other people when driving a car other than your own
To get an SR-22 certificate if you have no other auto insurance
If you are suspended from driving your car due to driving under the influence (DUI), but your penalty allows you to drive someone else's car, you may need Non-Owned Car Insurance
If you were pulled over for reckless driving, especially without active liability coverage.
If you are looking to purchase Non-Owned car insurance in Texas, consult with a state-licensed insurance agent.
How Much Non-Owner Car Insurance Do you Need?
The amount of Non-Owned car insurance you need is determined by how much extra liability protection you want, in addition to the liability coverage currently on the vehicle through its owner.
The minimum amount of non-owner car insurance coverage you can get in Texas is the same as the minimum liability requirement for any vehicle registered in the state:
$30,000 for Bodily Injury (BI) per-person
$60,000 for Bodily Injury per-accident
$25,000 for Property Damage (PD) per-accident
If you are borrowing a vehicle from a friend, family member, co-worker, or employee to run an errand, do you know what liability coverage they have on the car you are about to drive? At the very least it is supposed to have the above outlined Texas state minimums. Quite frequently the limits in place may be much higher. In that case, you are already protected by this insurance, up to its limits.
But what happens when you cause more damage than the existing auto liability coverage provides? For example, if the borrowed car had twice the Texas state-minimums of liability coverage:
- $60,000 for BI per person
- $120,000 for BI per accident
- $50,000 for PD per accident
… and the borrowing driver caused a vehicle accident, where any of the below situations occurred:
1: Bodily injuries of any ONE person hurt by the accident exceed $60,000
2: Bodily injuries of ALL victims of the accident exceed $120,000
3: Property Damage to ALL property combined exceeds $100,000
… the at-fault driver will be liable for the difference.
The possible damages can escalate based on:
Size of the accident,
Severity of the accident,
Amount of people involved,
Amount of vehicles involved,
Types of vehicles involved, and
Types of property damage.
Medical treatment can be very costly, and the more people are involved, the more your liabilities go up. Ambulance and emergency services (EMS), Emergency Rooms (ER) charges, surgeries, medications, specilatis visits, follow up appointments, etc. It can get expensive fast, so make sure to carry enough coverage to pay for the bodily injuries you may cause while driving a vehicle that does not belong to you.
The same goes for property damage. It does not take much to damage a vehicle to the point where it is considered a “total loss” by the insurance company. If it will take more that 70% of the vehicle’s current value to repair it to pre-accident condition, it is most likely a total-loss. If you damage a luxury or an exotic vehicle, or a real estate property, it is easy to run up liability property damages into hundreds of thousands dollars.
You need to carry enough Non-owner car insurance, not to worry about not being able to afford to pay for the possible liability damages, regardless of what kind of coverage the borrowed vehicle may have.
If you are considering Non-Owned Car Insurance, consult with a knowledgeable and state-licensed insurance professional.
What Non-Owner Car Insurance Coverage Do you Need?
The type of Non-Owner car insurance coverage you need in Texas depends on what you need to cover with the policy. You can either get Rental Car Insurance or Liability Car Insurance. A Rental Car Insurance plan provides coverage while driving a rented vehicle, while a Liability Car Insurance plan covers the cost involved in treating injuries and repairing damages in the event of an accident.
As an employer, getting a Commercial Non-Owned Car Insurance plan for employees protection may be a good business decision. It will protect your business against the costs you may incur if an employee is involved in an accident using a borrowed vehicle while on an official duty.
You can also get a Borrowed Non-Owned Auto Insurance plan for personal protection if you regularly make use of other people’s cars. For instance, it will provide coverage if you are involved in an accident while using your neighbor’s truck to pick up lumber from a home remodeling store.
Is Non-Owned Auto Insurance Required by Law in Texas?
Texas law may require Non-Owned Auto Insurance, also known as SR-22, if the driver is considered high-risk due to:
Reckless driving
Driving uninsured
DUI or DWI.
How Does Non-Owner Car Insurance Work in Texas?
Non-Owned car insurance serves as a fallback insurance policy; it provides coverage for damages and injuries whose costs are beyond the borrowed vehicle's primary insurance plan. Since this is a secondary-type plan, Non-Owned auto insurance normally does not have a deductible.
Non-Owner Auto insurance covers the damages you cause to others, while driving a borrowed vehicle. If the vehicle already has liability coverage, you are covered up to the purchased limits.
If the borrowed vehicle does not have liability coverage, non-owned car insurance becomes primary and covers damage claims up to its limits.
What Does Non-Owner Car Insurance Cover?
Texas Non-Owner Auto Insurance provides liability coverage for individuals driving cars that they do not own. It is a liability-type car insurance policy.
Liability Car Insurance provides coverage for injuries and damages you inflict on others while driving. The terms of Liability Car Insurance varies based on the provider, but they all include:
Bodily Injury Liability
Property Damage Liability
Bodily Injury Liability can pay for the medical expenses incurred from treating people you injure in an accident. It can also compensate for the loss of income due to their injuries. A Property Damage Liability covers the cost of damages done to other cars, and properties destroyed in an accident.
What is Non-Owner Car Insurance Good for?
Non-Owned Car Insurance is good for the following:
Paying for treatments of injuries and the costs of repairing damages you cause while driving a borrowed or rented vehicle
Providing insurance coverage when using car rentals or car-sharing service
For maintaining your insurance coverage while not actively driving
You can also use a Non-Owned Car Insurance plan as evidence of financial responsibility when getting your Financial Responsibility Insurance Certificate (SR-22).
If you need more information on the uses of a Non-Owned Car Insurance policy, speak with a knowledgeable Texas-licensed Property and Casualty insurance agent.
What Does a Typical Non-Owner Car Insurance Include?
In Texas, a typical Non-Owned car insurance includes coverage for the following costs in the event of an accident:
Bodily Injury
Property Damage
Attorney fee in the event of litigations arising from injuries and damages caused by an accident for which you are solely responsible.
You may also add other types of auto insurance coverage to your Non-Owned Car Insurance. Some insurance companies allow coverage for uninsured/underinsured motorists and personal injuries protection as an add-on to Non-Owned Car Insurance. Contact a Texas-licensed insurance agent before deciding on insurance plans. A state-licensed insurance agent will help you assess your needs and make recommendations on the best choices of coverage.
Who is Covered by Non-Owner Car Insurance?
Non-Owned Car Insurance provides coverage for the insured, in case they cause injuries and/or damages while driving a borrowed vehicle.
An insured under the Non-Owned car insurance may be:
an individual,
a business or organization, and
its employees.
What is not Covered by Non-Owner Car Insurance in Texas?
Non-Owned Car Insurance in Texas does not provide coverage for:
Injuries to the insured under the Non-Owner policy
Damages to the vehicle driven by the insured
Injuries to the employee using the vehicle if the policyholder is an organization
Personal properties of the establishment if the policyholder is an organization
Accidents caused by the policyholder while driving in Mexico (check with your insurance agent for possible options of coverage)
Accidents caused by the policyholder while driving a car for a fee. For example, if you are a driver employed by a car-hailing service
Accidents you cause intentionally
Driving under the influence (DUI)
What Does Non-Owner Auto Insurance Typically Exclude?
Non-Owned Auto Insurance plan typically excludes:
Collision coverage
Comprehensive coverage
Rental reimbursement
Towing cost reimbursement
To get coverage for the listed benefits, a policyholder must have an auto insurance policy that lists these coverages in its policy document. Non-Owned Car Insurance does not provide coverage for personal injuries of the insured or damages to the borrowed vehicle.
What is an Example of Non-Owner Car Insurance?
In Texas, non-owner car insurance can be any of the following types:
Borrowed non-owned auto insurance
Commercial non-owned auto insurance supplement
SR-22 non-owner insurance
Rental car insurance
Irrespective of the type, it provides you coverage under different scenarios. For instance, it provides you coverage if you are:
A car mechanic who delivers people’s cars after servicing or you borrow cars from friends and relatives to run errands.
Someone who had problems with the law for speeding or driving under the influence, and may, require an SR-22 certificate.
Someone who has a business that requires employees to borrow cars to run errands on behalf of your company. These errands may include frequent trips to the banks to make cash deposits, or to pick up supplies for production.
A regular traveler who uses rented cars as a means of transportation in every new city.
You may also need non-owner auto insurance to get an SR-22 certificate to prove your ability to pay for injuries and damages you cause in the event of an accident. In commercial insurance, Non-Owned Auto coverage is usually purchased as an extra liability rider along with the property and general liability policy. This allows the business to have its employees drive borrowed vehicles.
What is the Most Common Use of Non-Owner Car Insurance?
The most common use of Non-Owner Car Insurance in Texas is to pay for costs of injuries and damages you cause to others while driving a borrowed or rented car. Non-Owned Car Insurance covers the expenses incurred for treating the injuries inflicted on the other party and the cost of repairing the damages done to their properties.
What is the Difference Between Non-Owned Car Insurance and Liability Auto Insurance?
Non-Owned Car Insurance only pays for treatments and costs of repairing damages caused by the policyholder. Unlike Non-Owned Car Insurance, Liability Auto Insurance offers coverage for uninsured motorists. Liability Auto Insurance can provide coverage for you and your passengers when hit by a hit-and-run driver or a motorist who does not have an insurance plan.
Do I Need Hired Non-Owned Auto Insurance - FAQ:
Do I Need Non-Owner Car Insurance if my Car is Paid for?
If your car is paid for and belongs to you, you do not need Non-Owned Car Insurance. However, if a car belongs to another person and you did not seek permission to drive it, you may need Non-Owned Car Insurance.
Do I Need Non-Owner Car Insurance if I Have a Car?
If you have a car, then you are required by law to carry Liability insurance, which covers the cars listed in the policy document. If you own this car, you at least must have liability coverage on it. If you are driving a vehicle that belongs to someone else, then you may need Non-Owned auto insurance. Non-Owned Car Insurance, unlike most auto insurance policies, provides coverage for the driver and not the vehicle.
Do I Need Non-Owner Car Insurance if I Can Pay Cash?
You do not need to have Non-Owned Car Insurance if you are willing to pay cash for the cost of treatments and damages you cause. Non-Owned Car Insurance is relevant if you do not want to bear the burden of payments alone. If you borrow cars, or rent cars often, you may want to get a Non-Owned Car Insurance plan. Contact a Texas-licensed insurance agent to explain the benefits of Non-Owned Car Insurance to you.
Do I Need Car Insurance if I Have Non-Owner Car Insurance?
In Texas, you need car insurance if you have Non-Owned Car Insurance, especially if you drive your own car. Non-Owned auto insurance does not provide coverage for your car; it only provides liability coverage for damages and injuries you inflict on other people in the event of an accident while driving a vehicle owned by someone else. If you are driving a car that belongs to you, then you need Liability (which is mandated by the state), and possibly Full Coverage auto insurance, especially if the vehicle is being financed.
Do I Need Non-Owner Car Insurance if I Live with my Parents?
Non-Owned Car Insurance will not cover you if the car you borrowed belongs to someone living with you. If you live with your parents, the best way to protect yourself is to have your parents add you to their auto insurance policy. Even if you are not on your parent’s policy, you would still be covered by it, if you borrow the vehicle with the owner’s permission.
Do I Need Non-Owner Insurance if my Roommate Has it?
A Non-Owned Car Insurance plan only provides coverage to the insured policyholder. If your roommate has one, their policy will not cover you in the event of an accident while borrowing their vehicle.
Do I Need Non-Owner Insurance if Renting a Car?
If you rent cars frequently and you normally purchase the insurance provided by the rental agency, you may need Non-Owner auto coverage. The insurance provided by the rental location is charged on a daily basis and it may be more cost-effective to use the Non-Owner coverage instead. (Note: Non-Owner car insurance does not cover the damage to the car itself, so make sure to verify if the rental company accepts it as an acceptable type of coverage
Do I Need Non-Owner Car Insurance if I Have Car Insurance?
You may not need Non-Owned Car insurance if you have car insurance. However, If you have an auto insurance plan but borrow cars occasionally, you may need Non-Owned Car insurance depending on your car insurance coverage.
Auto insurance provides different types of coverage for different needs, which may or may not provide sufficient coverage for the individual driving the car in the event of an accident. If you have a type of insurance that does not provide enough coverage, you may need non-owner car insurance:
If you have liability-only car insurance on your own vehicle, then most likely you do not need non-owner car insurance for borrowed vehicles, because your own liability coverage will follow you. If you think that you do not have sufficient liability coverage on your own vehicle, you may need to get additional coverage through Non-Owner car insurance. Make sure to discuss your auto insurance needs with a qualified and state-licensed insurance agent.
Is There a Waiting Period for Non-Owner Car Insurance?
There is no waiting period for Non-Owned Car Insurance in Texas; coverage begins after the premium payment is made to the insurer.
Who Can Get Non-Owner Car Insurance in Texas?
Non-Owned Car Insurance is suitable for individuals and businesses:
Who frequently borrow or rent cars
Who use car-sharing services regularly
Who wants to get a driver’s license or renew their existing license without owning a car
Who wants to file for an SR-22
Who Qualifies for Non-Owner Car Insurance?
In Texas, anyone who is of driving age has a driver’s license and is capable of paying premium qualifies for non-owned car insurance. For instance, if you are a 20-year-old with a driver’s license, and you can pay the monthly premium, you qualify.
Also, businesses and groups that meet the requirements also qualify for non-owner car insurance, to protect themselves from the liabilities of employees using each other’s vehicles for work purposes.
Who Needs Non-Owner Car Insurance?
Generally, your need for Non-Owned Car Insurance can be for several reasons. You need non-owner auto insurance coverage if:
You borrow cars frequently for personal use and require coverage due to the car owner not having (or not having enough) liability coverage on the borrowed vehicle. You may need non-owner car insurance to cover the cost of the injuries and damages you may cause in the event of an accident.
You use car rental as a means of conveying yourself on a regular basis. Some rental services have auto insurance plans that provide minimal benefits, and may not provide you enough coverage in the event of an accident.
Car-sharing services. You may end up with vehicles that do not have sufficient liability insurance coverage, a non-owner insurance policy will save costs in the event of an accident.
You want to maintain your auto insurance coverage even when not actively driving your own car. Non-owner insurance policy provides you coverage in emergency cases where you may need to use other people’s cars.
You want to have coverage for a short period to cover the lapse in coverage in your car insurance plan, or upon the expiration of a previous auto liability policy.
You have a business that lets employees use personal auto for work. You may need commercial non-owned car insurance to provide coverage to your employees using cars that do not belong to the company for the company’s business. For instance, an employee may need to borrow a colleague’s car to drop off a parcel on behalf of the company from the post-office.
You are seeking to show financial responsibility to reinstate your driver’s license after a ban. Your driver’s license may be reinstated if you have a non-owned car insurance policy with SR-22 filing.
Who Should Get Non-Owned Car Insurance?
You should get Non-Owned Car Insurance if:
You do not want to be burdened by the costs associated with car accidents when driving other people’s cars. In the event of an accident, the costs of injuries and damages can be hard to afford paying out of personal savings.
You need lower cost auto insurance to provide limited coverage in the event of an accident, if you drive a borrowed vehicle.
You need to show proof of financial responsibility certificate (SR-22).
You need an auto policy to provide coverage due to lapse resulting from the expiration of your previous auto insurance plan.
You need a car insurance policy even though you do not own a car.
What are the Benefits of Non-Owned Car Insurance?
A Non-Owned Car Insurance primarily pays for the costs incurred for treating bodily injuries inflicted on others. It can also pay for damages you cause to other people's properties. A Non-Owned Car Insurance pays the attorney fees for a court process that may ensue in the event of an accident.
PROs and CONs of Non-Owner Car Insurance in Texas
PROs of Non-Owned Car Insurance
A Non-Owned Insurance plan is good because it helps you to:
Avoid out-of-pocket payments for injuries and damages you cause to others
Have an auto insurance plan without having a car
Offset the cost of expensive litigations resulting from damages and injuries you cause
CONs of Non-Owned Car Insurance
Non-Owned Car Insurance does not offer coverage for the policy owner’s injuries and damages
It does not pay for damages to the borrowed car in the event of an accident
Non-Owned Car Insurance plan is only available to licensed drivers
Non-Owned Car Insurance does not provide coverage if the borrowed car belongs to someone you live with
Discuss your insurance needs with a state-licensed P&C insurance agent, who can guide you through the Non-Owned Car Insurance options that may work for your situation.
Is Non-Owned Car Insurance Worth Buying in Texas?
Non-Owned Car Insurance is worth buying in Texas for the following reasons:
Even if you do not have a car, it covers certain expenses that may arise after an accident
Apart from payment for damages and injuries, Non-Owned Car Insurance can help you avoid penalties arising from insurance coverage lapses
A Non-Owned Car Insurance plan can help you in securing your SR-22 license. Texas law requires this as proof that you have the minimum liability insurance.
What Happens if you Don't Have Non-Owned Car Insurance?
Texas law requires you to demonstrate the ability to pay for damages and injuries you cause to others while driving. You violate state law if you are driving a borrowed car that does not have any or has insufficient liability coverage. If you are caught driving without minimum-required liability coverage, you may be arrested and will need to pay a fine. Repeated offenses may cost up to $1,000, and suspension of license.
Also, driving a borrowed car in Texas without Non-Owned Car Insurance means you will pay for injuries and damages you cause out-of-pocket.
If a business does not get Non-Owned vehicle coverage as part of its Liability insurance package, and its employee borrows a car and crashes it while driving to the airport to pick up a business partner, the company is liable. The company will have to pay for the injuries and damages resulting from the accident. If the injured parties decide to sue, they will sue not the driver, but the company for which the driver was working while causing the accident. In such a lawsuit, the company’s assets must be protected.
Why is Non-Owned Car Insurance Important?
Non-Owned Car Insurance is important because it:
Protects the driver of the borrowed vehicle - in case the vehicle doesn't have any or not enough liability coverage.
Protects the owner of the vehicle that is being borrowed - giving them peace of mind that if their vehicle is involved in an accident, the injured or damaged “other” parties will be paid (except for damages caused to the borrowed vehicle and the borrowing driver).
Protect the business from paying out of pocket for costly treatments and damages from accidents the employees may cause.
Limits the financial burden of expensive court litigations.
Serves as an alternative plan for temporary car insurance coverage.
Can be used to apply for or renew SR-22 license and as temporary coverage.
What Happens When your Non-Owned Car Insurance Lapses?
When your Non-Owned Car Insurance lapses, the insurance company will notify you. Texas insurance companies generally provide a grace period of 31 days, during which you must pay your outstanding premium, or lose coverage. During the grace period, the insurance company will continue to provide coverage. However, you will lose your insurance coverage if you do not pay the premium and other outstanding debts on or before the expiration of the grace period.
Speak to a knowledgeable Texas-licensed insurance agent to discuss Non-Owned AutoInsurance that may work best for you.
