Can you transfer car insurance between people? If you have car insurance and a family member has no car insurance, then can you just swap policies between the two family members?
Today, we’re explaining everything you need to know about transferring car insurance policies between people.
Car Insurance Policies Typically Follow the Car, Not the Person
The first and most important thing to note is that car insurance policies follow the car – not the person.
In most cases, you can let your friend drive your car under your own insurance policy without transferring the policy to that person. Your car will still be covered while your friend drives it – assuming you’re still the primary driver of the vehicle and you’re following the rules of your insurance policy.
When you buy car insurance, your insurance company will assume that different members of your household will use your vehicle. Your car insurance company calculates the risk of the primary driver, but they might also calculate the risk of other drivers in the household. If someone in your household has a DUI or other driving offense, then he or she may be prohibited from driving your vehicle (or you may have to pay extra to add them to the policy).
If a friend, a member of your household, or a family member occasionally drives your vehicle, then you won’t need to transfer your car insurance policy. In most cases, your car insurance will transfer to whoever is driving your vehicle, assuming that person can legally drive and is abiding by the terms of your insurance policy.
There are other situations, however, where you may have to transfer vehicle insurance to another individual.
Short-Term or Temporary Insurance Transfers
In some situations, you’ll need a short-term or temporary transfer of insurance. A short-term insurance transfer may be required when you do not have access to your car and you are not insured to drive another vehicle.
Under this type of transfer, you’ll be able to drive another vehicle while being completely insured – assuming the other vehicle does not belong to your employer and is not being leased.
What about rental cars? Typically, rental cars are fully insured by the car rental company, so there’s no need to buy extra insurance or transfer insurance when driving a rental car.
Transfer of Ownership and Transfer of Insurance
Insurance can also transfer when selling your vehicle to another person. If you’re completing a private vehicle transfer, then your insurance will go with the vehicle to the new driver, although you’ll need to complete paperwork to make sure the insurance carries over.
The first step is to transfer the ownership titles and change ownership registration at your local Department of Motor Vehicles.
Once ownership has been transferred and both parties have signed the ownership title, you can contact your insurance company to complete the switch.
Your insurance company will have a well-established procedure for transferring insurance between individuals. Initiate the transfer of liability to the vehicle buyer, then make sure you get a document providing the transfer of liability. You’ll need to submit that transfer to the local DMV, which will then certify your car as being legal to drive.
The important thing to remember is that auto insurance will only remain valid if the names on the ownership documents match the names on the insurance documents.
If the names don’t match, then the insurance may not be valid.
Once the new owner’s name is on the proof of insurance paperwork, and the insurance company and DMV have been informed, the new owner can legally drive the vehicle.
At this point, the new vehicle owner can start shopping for a better insurance policy for the car. The new owner can compare quotes from different car insurance companies, for example. They may be able to find a better or worse price than what you found for your vehicle.
Car Insurance Prices Vary Widely When Transferring Between Drivers
Remember: your car insurance company calculates premiums based on a number of things unique to you. The car insurance company looks at your age, driving record, and other information to determine your risk, for example.
If your car insurance is being transferred from one person to another, then this risk can change significantly between individuals. You might have no at-fault collisions on your record, for example, while the new vehicle buyer has multiple at-fault collisions.
For this reason, car insurance prices can vary widely when policies are being transferred between two individuals.
Ultimately, you can transfer car insurance from one person to another, but it may not be necessary in certain situations. If a friend or family member occasionally drives your vehicle, for example, then you won’t need to transfer car insurance. However, if you’re selling your vehicle, then you’ll need to contact your car insurance company to ensure the insurance transfers.