Can I Insure a Car That Is Not In My Name?
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There are several situations where you may want to insure a car that you do not own.
But can you really insure a car that’s not in your name? Or can you only buy insurance for a vehicle that you own?
It’s not a common scenario, but there are reasons to insure a vehicle that you don’t own. You might insure a vehicle that belongs to a family member living at your house, for example, because you frequently drive that vehicle.
Generally, however, the owner of the vehicle needs to be the one to insure the vehicle.
Insurance companies have this rule because they require the primary policyholder to have an “insurable interest” in the car they’re insuring.
When you have an insurable interest in a vehicle, it means you have a reason to insure that vehicle. When you own a vehicle, you have an insurable interest because the vehicle is an asset: you own the asset and you don’t want to lose that asset.
If you are not the owner of the vehicle, then you may not have an insurable interest. You’re not losing anything if that vehicle gets destroyed in a car accident.
Insurance companies may also push back against non-owner car insurance because of the risk of fraud.
Nevertheless, there are certain situations where you can buy insurance for a vehicle you do not own. If you want to buy car insurance for a vehicle you do not own, then you have two options:
- Prove insurable interest by co-titling the vehicle
- Buy non-owner insurance
How to Prove Insurable Interest
The best way to get insurance for a vehicle you do not own is to prove insurable interest. You need to prove that you have a reason to insure that vehicle.
If you own the vehicle, then you can provide the car’s registration or title (i.e. the pink slip) to prove insurable interest.
If you do not own the vehicle, then the car’s registration or title will not be in your name, making it difficult to get insurance. However, you may still be able to prove insurable interest by co-titling the vehicle.
How to Co-Title a Vehicle
When you co-title a vehicle, you are adding an additional owner to the car. Instead of being owned by one person, the car will be owned by two or more people. By co-titling a vehicle, you may be able to prove an insurable interest in that vehicle and qualify for car insurance.
Each state’s Department of Motor Vehicles has different rules for co-titling a vehicle. Typically, you and the owner of the vehicle need to jointly apply for a new title. You fill out a form, add the names and information of both people listed on the title, pay a fee, and go to the DMV in person to sign up.
If you have borrowed money to buy your vehicle and are still paying off that loan, then you’ll need to notify the lienholder to see if you can add an additional owner to the title.
If you are able to successfully co-title the vehicle, then you should have no trouble getting insurance for that vehicle. Your name is listed on the title, which means you’re the (part) owner of the vehicle. You have an insurable interest in the vehicle and can easily insure the vehicle.
Getting Non-Owner Car Insurance
Insurance companies also offer something called non-owner car insurance. This type of car insurance covers you when driving a vehicle you do not own.
Non-owner car insurance is different from ordinary car insurance. It’s like a barebones version of car insurance. Typically, it includes just liability coverage – not collision or comprehensive coverage. The policy is designed to protect you from liability – say, if you hit someone while driving someone else’s vehicle or if you collide with another vehicle.
In this situation, the vehicle you’re driving still needs its own car insurance coverage. As a non-owner, you are personally covered for liability through your non-owner car insurance. However, the vehicle may still need its own liability insurance (through the owner), and it may also need collision or comprehensive coverage (although they’re not required in any state).
You will never be able to add collision and comprehensive coverage to a non-owner car insurance policy. Collision coverage covers the cost of repairing your own vehicle after a collision, while comprehensive coverage covers non-accident-related damages like hail damage, theft, vandalism, and fallen tree branches.
Ask to Get Added to the Vehicle Owner’s Insurance Policy
If you’re trying to get coverage for a vehicle you do not own, then there’s another way: ask to get added to the vehicle owner’s insurance policy.
Most insurance policies allow you to easily list multiple drivers. In fact, most insurance policies require you to list the names of any family members or roommates living at your address who could drive your vehicle. You may also be required to list any friends who drive your vehicle frequently.
If the vehicle has valid car insurance already, then you should be able to add yourself to the policy. You’re not the primary policyholder, but you should still be covered when driving the vehicle (assuming you have the permission of the vehicle’s owner).
The car insurance company may check your driving record. If you are a high-risk driver, then your friend’s car insurance premiums could rise significantly by having you listed as a named driver.
What Happens If I Get Into an Accident in a Vehicle I Do Not Own?
If you borrow a friend’s vehicle and get into an accident, then your friend’s car insurance policy will come into effect.
Your friend has car insurance on the vehicle, and that car insurance will cover medical bills, vehicle damage, and other expenses incurred by anyone you injured (assuming you were at fault for the accident).
If you were not at fault for the accident, then the at-fault driver’s car insurance may come into effect, covering any medical bills and vehicle damage costs you may have incurred.
If you have non-owner car insurance, then this policy can act as secondary coverage when driving someone else’s vehicle. Your friend’s car insurance might be used first. Then, if coverage limits are completely used up, the secondary coverage – your non-owner policy – will come into effect up to the limits of that policy.
If there is still damage remaining after the primary coverage and secondary coverage is used up, then this damage needs to be paid out of pocket.
It’s difficult to insure a vehicle that is not in your name. Insurance companies do not typically allow you to insure a vehicle that is not in your name. However, there are two ways you may be able to insure a vehicle you do not own, including:
- Prove insurable interest by adding yourself to the title (co-titling)
- Buy non-owner car insurance
Alternatively, you can ask the driver to get added to the vehicle’s insurance policy.