Many people go about their daily lives without needing a car. However, from time to time, occasions arise where a car is needed, like embarking on a weekend getaway or transporting furniture to your new home. While drivers cannot insure a car that they don't own, there are ways to use a vehicle without your own auto insurance policy. This is where non-owner car insurance comes in handy. Non-owner car insurance can ensure you are protected when you borrow a friend’s or family member’s car. To learn more about insuring a car in someone else’s name in Ontario, keep reading.
What is non-owner car insurance?
Non-owner car insurance is a type of auto insurance coverage designed to protect a driver who does not own the vehicle they are driving. For example, non-owner car insurance can be useful if you frequently borrow cars from friends, rent cars from rental companies, or participate in a car-sharing program like Zipcar.
Non-owner car insurance can help protect you from the financial ramifications of an accident or damages, should something happen while you’re driving another person’s or company’s vehicle. Without non-owner car insurance, you may be forced to pay out-of-pocket for the cost of property damage, bodily injuries, lawsuits, and more.
Further, it’s worth noting that car insurance is mandatory for all drivers in Canada, which means you shouldn’t be driving (even infrequently) without adequate coverage.
Who can purchase non-owner auto insurance?
Any driver in Canada who holds a valid driver’s licence and does not own their own vehicle is eligible to purchase non-owner auto insurance. Keep in mind that many insurance companies will not offer non-owner car insurance to drivers who have access to a car in their household (e.g. if you live with your parents who each have a vehicle).
Therefore, if the person who owns the vehicle you frequently borrow lives in your household, non-owner car insurance may not be right for you. Instead, other options like occasional driver insurance or being added as a secondary driver to an existing policy might be the best way forward. That said, if no one in your household owns a vehicle, including yourself, then non-owner auto insurance can be a worthwhile option. Contact BrokerLink to learn more about who qualifies for non-owner auto insurance in Canada.
Should you buy non-owner car insurance?
If you are not sure whether non-owner car insurance is right for you, consider the following scenarios. If any of them apply to you, purchasing non-owner car insurance might be a wise decision:
1. You borrow cars frequently
The first sign that non-owner car insurance is right for you is if you frequently borrow cars from friends or family members. While your friend’s car insurance policy would cover you while you are operating the car, a non-owner policy could cover damages that exceed what your friend’s policy offers.
2. You rent cars often
Are you a world traveller that often finds yourself renting cars at home and abroad? This is another sign that non-owner car insurance is right for you. When you rent a car, you are typically responsible for any damages incurred by the vehicle. Unless you pay for additional collision damage or loss damage coverage (which can be expensive when purchased directly from rental car companies), you will be forced to pay for the cost of any damages out-of-pocket.
Ultimately, if you rent cars often, purchasing non-owner car insurance can save you money in the long run. Plus, most non-owner car insurance policies offer more protection than the policies offered by rental car companies, so in addition to cost savings, you may also benefit from better coverage.
3. Your last auto insurance policy is at risk of lapsing
If you owned a car in the last year but have since sold it or lost it to damage, your auto insurance policy may be at risk of lapsing. Lapsed policies are red flags for insurance companies. A lapsed auto insurance policy puts you at risk of being deemed a high-risk driver.
Thankfully, buying non-owner car insurance can help you avoid falling into this category. A non-owner policy can help bridge the grab between your last vehicle and when you eventually get another vehicle. No gaps in your auto insurance history are always a good thing in the eyes of the insurance company and could save you money down the line.
What is covered by non-owner car insurance?
Non-owner car insurance policies typically include third party liability coverage, accident benefits coverage, and uninsured automobile coverage, all of which are mandatory components of car insurance in Ontario. These coverages can protect the policyholder against property damage and bodily injury resulting from collisions, hit-and-runs, and more.
Third party liability coverage
Third party liability coverage provides legal protection if you injure someone else or cause property damage to another person’s property on the road. This type of coverage can help pay for medical expenses associated with bodily injuries or repairs of damaged cars, as well as any applicable legal fees and settlements up to the coverage limit.
Uninsured automobile coverage
Uninsured automobile coverage is designed to protect you and any passengers in your vehicle if you get into a collision with an at-fault driver who is either uninsured or underinsured. This type of coverage can also protect the policyholder in the event of a hit-and-run.
Accident benefits coverage
If you, a passenger, or a pedestrian requires medical attention following a collision, accident benefits coverage can help. This type of coverage is provided no matter who was at fault for the accident and it can help cover a wide range of medical expenses like prescription medications, physical therapy, or rehabilitation, as well as loss of income.
What is not covered by non-owner auto insurance?
Non-owner auto insurance policies typically do not include the following coverage types:
If you get into an accident with another vehicle or object on the road, no matter who is at fault for the accident, collision coverage can help cover the costs. Under the collision coverage section of your policy, you can receive compensation to help pay for any property damage that resulted from the accident, such as a damaged car.
Comprehensive coverage protects against a wide range of circumstances other than collisions. Sometimes referred to as parked car insurance, comprehensive coverage will compensate you in the event of damage caused by an insured peril. Examples of insured perils are theft, vandalism, water damage, fire, riots, falling objects, and more.
*Please note that non-owner car insurance doesn’t provide collision or comprehensive coverage because this type of protection is exclusively for vehicle owners, as it pays for repairs or replacement of a personal vehicle.
How much does non-owner car insurance cost in Ontario?
Non-owner car insurance policies typically cost less than the average auto insurance policy. However, rates vary. As with any other type of auto insurance, insurance companies will consider a wide range of factors to determine your premium. From age and driving record to claims history, below is a list of factors that are used to calculate non-owner car insurance rates in Ontario:
- Driving record
- Driving experience
- Local laws
- Annual mileage
- Insurance claims history
- The deductibles, coverage limits, and coverage types you choose
- Marital status
Can you purchase non-owner car insurance from an insurance company in Ontario?
Yes, non-owner car insurance can be purchased directly from an insurance company in Ontario. However, it’s important to note that the province of Ontario does not allow a non-owner insurance policy to be purchased as a standalone product. Rather, it can only be purchased as an add-on or endorsement to an existing auto insurance policy. Therefore, the person whose vehicle you borrow the most (e.g. a friend or family member) will need to purchase the policy as an add-on to their existing car insurance policy.
While an insurance company can help you purchase non-owner car insurance, so too can an insurance broker. In fact, we recommend contacting a reputable brokerage in your area, such as BrokerLink, that can provide an unbiased, objective opinion on whether non-owner car insurance is right for you. From there, your dedicated insurance advisor will determine the estimated cost of a non-owner policy.
How does a non-owner policy impact auto insurance premiums?
Anytime a driver adds an endorsement to their policy, such as a non-owner add-on, it is likely to raise their insurance premium. Additionally, if the non-owner on your policy gets into an accident while driving your vehicle, even if the damage is covered, your premium may further increase upon renewal.
Tips for purchasing auto insurance on a vehicle you do not own
Obtaining car insurance on a car you do not own can be tricky. However, you can still purchase this type of coverage, and doing so can be made easier by following the tips below:
1. Consider adding your name to the title of the vehicle
If adding your name to the title of the vehicle is an option, doing so could provide that you have an insurable interest in the car. Keep in mind that it is much easier to co-title a car that is owned outright (i.e. paid in full) versus one that has an outstanding loan.
2. Read the insurance company's rules and regulations carefully
Every insurance company is different. Make sure you qualify for non-owner car insurance and are not already covered under another person’s policy. For example, insurance companies often have different rules surrounding ownership and partial ownership of vehicles. Whether you live with the primary owner or have an insurable interest in the car can all impact your ability to obtain coverage.
3. Explain your situation
Insurance coverage is not black and white. Some insurance companies are flexible. For this reason, if you are trying to purchase car insurance for a car you do not own, set a meeting with an insurance provider and take the time to explain your situation. Some insurers may grant coverage if you can demonstrate that you cannot afford a vehicle of your own and have no other transportation options.
4. Be honest and upfront with the insurance company
Honesty matters, especially when it comes to insurance. During your meeting with the insurance company, be honest and upfront about the facts. Tell them about your driving history, financial situation, and the circumstances of your driving needs (e.g. how often you intend to drive the vehicle, where and when you will be driving it, why you need to drive it, and how far you plan to drive it).
Providing the insurance company with all the facts can increase your odds of being approved for a policy. In contrast, if you try to hide or conceal information, they are more likely to deny you (or if they approve you but find out you lied later on, they could cancel your policy).
Get in touch with BrokerLink to learn more about insuring a vehicle in someone else’s name
Still have questions about insuring a car you do not own in Ontario? BrokerLink has the resources and expertise to answer your questions about insuring a car in someone else’s name in Ontario. One of our dedicated insurance advisors will be pleased to assist you, taking the time to understand your unique circumstances and driving needs. From there, we can help find a solution and explain the insurance options available to you. Whether you are interested in non-owner car insurance or want to go in another direction, we are here.
BrokerLink can be reached by phone, email, or in person at one of our many locations in Canada. We can’t wait to hear from you!
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