Mark van Seventer

Moving to California Without a Car: Finding Affordable Non-Owner Car Insurance

It's been a bit quiet on this blog for the last couple of months, but for good reason. A lifelong dream finally came true: we packed up our belongings and moved from Boston to California.

Between finding a place to live, updating addresses, and transferring driver's licenses, the usual moving logistics kept us busy. Once we were settled, however, it was time to go explore California. And that's where we ran into a challenge.

Car-less Living

We don't own a car, and we don't really want to. But we do rent one frequently as there's so much we want to see. Now, when you rent a car, there are two separate things you need to protect against:

  • Damage to the rental car,
  • Liability if you injure someone or damage their property.

Back in Boston, we didn't have to worry as we had car insurance, and those policies typically extend to occasional rental car usage.

Credit Cards

In the United States, damage to your rental car is often covered by credit cards, even if you don't have personal auto insurance.

We primarily pay for our rentals with the American Express Platinum card. Even without their Premium add-on, it covers:

  • Up to $75,000 in damage,
  • Rentals up to 30 days,
  • $300,000 in Accidental Injury Coverage (which is relatively uncommon benefit, and really nice to have).

There's no one-size-fits-all solution here. For example, some exclusions mean we keep our Chase Sapphire Preferred card at hand when renting internationally (Italy being one such case), or rent from local companies abroad that might not take American Express. But broadly speaking, physical damage to the rental car is usually the easy part.

Liability is where things get challenging.

Mind the Gap

Liability Coverage, paying for injuries or damages to others, is never covered by credit cards.

If you injure someone (with your rental car or otherwise) in the United States, you're at risk of having to pay a lot of money. Think tens or hundreds of thousands of dollars.

Rental car companies often include basic liability coverage, but:

  • They're often only required to provide state minimums, which can be shockingly low (think ~$10k),
  • You're still personally on the hook to reimburse the rental company in many cases,
  • And in California, no liability coverage is included with your rental at all thanks to state laws.

Normally, your personal auto insurance policy would step in here. But since we didn't have one, we were left with two options:

  • Buy the rental companies liability insurance, sold as supplement to the tune of $12.95+ daily,
  • Find a Named Non-Owner (NNO) policy.

In Search of a Named Non-Owner Policy (NNO)

An NNO policy is designed for people who don't own a car, but drive one regularly. This policy provides liability coverage only, and it follows you, not the vehicle. In theory, it's the perfect solution. In practice, it's ... hard to find.

We estimated we'd rent cars around 60 days per year, which would cost us roughly $800+ annually if we bought the liability supplement from the rental car company. Surely there had to be a cheaper option.

Online, we found scattered reports of people paying $200–$300 per year for NNO policies, but details were scarce. Information we found was outdated, and it's impossible to retrieve a quote online. Picking up the phone, we contacted many local and national insurance providers (State Farm, Progressive, Geico, GM Insurance), but the results were discouraging:

  • Many no longer offer NNO policies at all,
  • The quotes we did get were much, much higher than $800,
  • And many only offered state minimum coverage, which defeats the entire purpose.

The Solution

As last attempt, we reached out to AAA. It took three calls to get to the right agent, but to our surprise, AAA was able to offer flexible coverage limits at reasonable cost. We'd break even after just a handful of rental days per year.

Additionally, the AAA membership provides you with roadside assistance benefits, plus gives you access to contracted rates with hotel and other travel providers, something we might make use of in the future.

The Outcome

With insurance sorted, we've already explored San Diego, Santa Barbara, and Ojai, with many more trips planned. If you live in California, or another state for that matter, without a car:

  • Yes, affordable NNO policies still exist,
  • Yes, you will have to call many insurers to find the right deal,
  • But it is possible, and worth the effort and savings.

Almost everyone owns a car in California, at least in Los Angeles. Even after a short time here, we aim to keep our life mostly car-free. Having Non-Owner Insurance gives us the peace of mind that when we do get out there in a rental, we're fully covered.