Do You Need Non-Owner Car Insurance?

Do You Need Non-Owner Car Insurance?

Written by Lisa Rennie
Fact-checked by Caitlin Wood
Last Updated August 31, 2021

Have you ever borrowed another person’s car and wondered what would happen if you got into an accident with it? How would car insurance work? Will you or the owner of the car be protected? 

With a non-owner car insurance policy, you will be. But it’s not always necessary in certain cases. 

Let’s go into more details about non-owner auto insurance to help you determine if it’s something you need for adequate coverage. 

What Is Non-Owner Car Insurance?

Non-owner car insurance provides coverage if you’re driving a vehicle you do not own. For instance, if you borrow your friend’s or family member’s car for a few hours and get into an accident that you’re at fault for, their car insurance policy may not cover all damages or loss suffered. 

But with a non-owner auto insurance policy in place, you’ll be protected from any costs incurred as a result of the incident. 

What Does Non-Owner Car Insurance Cover?

Non-owner car insurance policies offer liability coverage, which covers any property damage and bodily injury of another party as a result of an at-fault accident in a car you do not own. It’s important to note that this policy only covers the policyholder, not other drivers. That said, you should be able to add other components to your policy to make it more comprehensive, such as the following:

  • Personal injury protection. This covers any medical treatment or rehabilitation expenses that any passengers need as a result of an accident. This additional protection may also cover other expenses not related to medical treatment, such as lost wages. 
  • Underinsured/Uninsured driver coverage. This covers any costs incurred if you are involved in an accident that was not your fault, but was caused by a driver with no car insurance policy. It will cover damage costs if the incident is caused by a driver who is unable to pay the full cost of the damage.

What Does Non-Owner Car Insurance Not Cover?

It’s just as important to understand what this type of insurance policy doesn’t cover so you’re not left with any unpleasant surprises if you ever need to file a claim after being involved in an accident with a car you don’t own. Non-owner car insurance policies typically do not cover the following:

  • Comprehensive coverage. A non-owner auto insurance policy does not cover damages to the vehicle caused by falling objects, theft, vandalism, bad weather, or fire. 
  • Collision coverage. Any damage caused to the vehicle after an accident will not be covered. 
  • Roadside assistance. No roadside assistance is covered, including towing, flat tire changes, and boosts. 

Who Is Non-Owner Car Insurance For?

A non-owner car insurance policy may be something worth considering if you meet the following criteria:

You Often Borrow A Car

Whether you don’t own your own car or your vehicle is unavailable for whatever reason, you may find yourself in need of a car on occasion. 

The insurance policy of the owner of the vehicle will cover you while you’re operating the vehicle, but a non-owner car insurance policy will cover any damages that exceed what their policy covers. If you find yourself frequently borrowing a friend’s or family member’s car, then a non-owner car insurance policy may be worth buying.

You Often Rent Cars 

When you rent a vehicle, you’ll likely need to assume all liability. While you can buy an insurance policy from the car rental company during the time that you’re using the vehicle, the policy is usually more expensive and doesn’t provide as much protection that a non-owner car insurance policy would. 

You Want To Avoid A Lapse In Your Policy

If you had a car not long ago but either sold it or lost it to theft or damage, the auto insurance policy you had on the car may be at risk of lapsing if you don’t reinstate it soon after. 

If you’re not quite ready to buy a new car, a non-owner car insurance policy can help ensure that your insurance premiums don’t increase once you eventually get another vehicle. 

If you let your car insurance policy lapse, your insurance provider may assume you’re a high-risk driver and may penalize you with higher premiums as a result. But a non-owner car insurance policy can help you avoid that. 

Where Can You Buy Non-Owner Car Insurance In Canada? 

In the provinces of Manitoba, Saskatchewan, and British Columbia, non-owner car insurance policies are available as standalone policies, which means they can be purchased without having to own a car with an existing policy. This helps those who frequently borrow or rent cars because they don’t own one themselves. 

In Saskatchewan, for example, non-owned car insurance policies are automatically included for those with an Auto Pak plan with collision and comprehensive auto insurance. In Manitoba and BC, on the other hand, non-owner auto insurance would need to be added to an existing policy. BC drivers have the option to purchase RoadStar or RoadStar Plus packages that include non-owner car insurance coverage. 

Unlike these provinces, Ontario does not allow non-owner car insurance policies to be purchased as a standalone product. Instead, an existing auto insurance policy is required in order to have non-owner insurance added as an endorsement to cover a rental or borrowed vehicle.

Form OPCF27 is a legal liability form for damage to non-owned vehicles and provides non-owner auto insurance to Ontario drivers who currently hold a car insurance policy. This form is an add-on to an existing policy that allows drivers to extend current coverage to a rental or borrowed car. 

With form OPCF27, you can also use your third-party liability and accident benefits coverage from your personal policy on the car you’re driving. And in case you ever get into an accident in a car you don’t own, you’ll have collision and comprehensive coverage, so you won’t have to pay all damages out-of-pocket. 

Having said all that, form OCF27 is only applicable in the following cases:

  • For drivers listed under your personal auto insurance policy
  • On standard rental cars under 4500kg
  • For no more than 30 days of renting a car
  • When driving in Canada and the US 

In Alberta and Atlantic Canada, this form is available as SEF27, and in Quebec, it’s QEF27. 

How Much Does Non-Owner Car Insurance Cost? 

Like any other type of auto insurance, certain factors play a key role in the cost of premiums for non-owner car insurance, including the following:

  • Age. Young drivers under the age of 25 usually pay more for car insurance because they are less experienced and may be more likely to take unnecessary risks on the road.  
  • Driving history. Drivers with a clean record – meaning little or no accidents or tickets – usually pay much less in auto insurance premiums. 
  • Frequency of driving and distance driven. If you put a lot of mileage on your car, your premiums may be higher. Similarly, the more often you drive, the more you’ll pay for car insurance.
  • Claims history. If you’ve got a long list of claims filed throughout your driving history, you’re more of a risk, which means you’ll be charged more for premiums. 
  • Coverage needed. More coverage is more expensive than a bare-bones auto insurance policy.

Ultimately, the cost of a non-owner auto insurance policy comes down to risk: the higher your risk in the eyes of your insurance provider, the more expensive your policy will be.

Non-Owner Car Insurance FAQs

How do you add non-owner car insurance to your current car policy in Ontario?

Form OPCF27 can be added to an existing car insurance policy as an endorsement for coverage of rented or borrowed cars.

Should I get non-owner car insurance if I have a regular car insurance policy in place?

If you already own your own vehicle and have a car insurance policy in place, then a non-owner policy won’t be necessary. You’ll have basic coverage if you’ve already got a standard policy on your vehicle. 

Should I get non-owner car insurance if I borrow my spouse’s car? 

If you often borrow your spouse’s car, there’s no need for a non-owner car insurance policy. Instead, consider having your name added to their policy. The majority of insurance providers require family members from the same household who drive the same vehicle to be listed on the car owner’s policy.

If I use my friend’s car regularly, should I get non-owner car insurance?

If you frequently borrow another person’s car, you might want to look into a regular car insurance policy, which will provide more coverage if you get into an accident compared to a non-owner car insurance policy. 

Will my car insurance be impacted if my friend gets into an accident with my car?

Your auto insurance policy provides coverage for anyone who drives your car, as long as they are legally allowed to drive in Canada and have your permission to use your car. If you lend your car to a friend who ultimately gets into an accident, your insurance policy will cover the damages. That said, your premiums will likely increase after filing a claim.

Final Thoughts

If you don’t own a car and borrow or rent vehicles frequently, a non-owner car insurance policy will offer protection. Depending on which province you live in, you may be able to buy this policy as a standalone product, or you may require standard car insurance and add non-owner insurance to your current plan. 

Rating of 5/5 based on 2 votes.

Lisa has been working as a writer for more than a decade, creating unique content that helps to educate Canadian consumers in the realms of real estate, mortgages, investing and financial health. For years, she held her real estate license in Toronto, Ontario before giving it up to pursue writing within this realm and related niches. Lisa is very serious about smart money management and helping others do the same. She's used a variety of financial tools over the years and is currently growing her money with Wealthsimple, while stashing some capital in a liquid high-interest savings account so that she always has a financial cushion to fall back on. She's also been avidly using her Aeroplan TD credit card to collect as many Aeroplan points as possible to put towards her travels!

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