Can I Insure a Car That’s Not in My Name?
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You may not always be able to buy insurance for a car that’s not in your name, although an insurer may cover you if you can prove you have a financial interest in insuring the car or are added to relevant vehicle documents such as the title or registration. Otherwise, you may be able to join the owner’s policy or secure limited liability coverage through a non-owner policy.
Read below for a more detailed overview of the various options you may have for insuring a car not in your name and why it is generally worth the hassle to obtain coverage.
Can I Insure a Vehicle That I Don’t Personally Own?
In general, it is possible to obtain car insurance for a vehicle you don’t personally own. However, it’s not as straightforward as buying coverage for a vehicle you do own since car insurance companies won’t want to insure you against financial losses related to a vehicle unless you personally have a stake in the condition of that vehicle.
For example, insurers want to make sure that no one could steal your car and then take out an insurance policy on it. As a result, some insurance carriers won’t sell you a policy at all if your name is not on your vehicle’s title, while others may require you to show proof of your financial investment in the car or get the vehicle’s owner involved in the process of procuring coverage.
What Are the Risks of Driving Someone Else’s Car Without Insurance?
While auto insurance generally follows the car rather than the driver, meaning you should be covered by another person’s car insurance policy if you drive their car with their permission, there are still some situations where you could have to personally bear the financial burden after a car crash. For example, if the owner of the car failed to inform their insurance provider that you would be regularly driving their car, the insurer could deny a claim if you were behind the wheel at the time of an accident.
Meanwhile, your vehicle may not be covered at all following the end of the new car grace period, which can vary from state to state and from insurer to insurer. For example, a policyholder’s existing coverage will extend to a new vehicle they purchase as long as they inform their insurance company about the new car within 30 days in North Carolina. However, if neither you nor the owner of the car takes action within 30 days, your car could end up uninsured.
Keep in mind that auto insurance is mandatory in every state except for New Hampshire and Virginia. This means that you risk facing legal penalties like fines and even jail time if you don’t make sure that the car you drive is properly insured.
How To Get Coverage for a Car You Don’t Own
The following section highlights some of the primary options you can consider if you need to get car insurance coverage for a vehicle you don’t own.
Some insurance companies may agree to sell you a policy for a car you don’t own if you can demonstrate insurable interest, which means that it would be a financial detriment to you if you were to lose the car and thus you are invested in its proper care. For example, this might apply if you drive a borrowed car to work and there is no alternative mode of transportation available to you.
In the example above, your insurer might retort that you could take a bus to work or ask to carpool with a co-worker. As a result, some car insurance companies may not let you insure a vehicle if your name isn’t on the title even if you have a demonstrable financial interest in the vehicle.
There can usually be at least two names listed on a car title, so the simplest way to show insurable interest in a car you drive is for the owner to add you as a co-owner on the vehicle’s title. You should note that you may have to pay a fee whenever you submit an application for a new title.
Whether two names on a car title are conjoined with “and” or “or” indicates the type of ownership the two people share. For example, if the title lists the owners as “John Doe and Jane Doe,” then the two owners share common ownership and both of them must sign off on future transactions such as transferring the title to someone else. Conversely, if the owners are listed as “John Doe or Jane Doe,” they share joint ownership and only one of them must sign off on future transactions.
If you regularly borrow or rent cars to drive but don’t actually own a car yourself, you can purchase a non-owner car insurance policy to secure extra coverage for yourself. Unlike a standard auto insurance policy, non-owner car insurance follows the driver rather than the car.
Typically, non-owner policies only include bodily injury and property damage liability insurance, although they may also come with personal injury protection (PIP) or medical payments coverage (Medpay). However, they generally will not include physical damage coverage to protect the vehicle you drive.
Non-owner auto insurance generally functions as a type of secondary coverage. This means that any car you drive will still need to be covered by its owner’s insurance and your non-owner coverage will only kick in for a claim that exceeds the primary policy’s coverage limits.
Get Added to the Car Owner’s Policy
Another simple method to insure a car you don’t own is to have the owner add you and your vehicle to their existing car insurance policy. Keep in mind that personal characteristics like your age and driving record will impact the policyholder’s car insurance premiums if they add you to their policy.
This option will likely make the most sense for you if you are a teenager and your parents have gifted you a car they bought in their names for your 16th birthday. However, you may not be able to join the car owner’s insurance policy if you aren’t related to them and don’t live in the same house as them.
Transfer or Get the Registration in Your Name
In some cases, you may be able to insure a car without putting your name on the title as long as your name is on the registration. For example, if you live in New York, you can only insure a car if it is registered in your name but you can register a car you don’t own or transfer the existing registration to yourself as long as the owner fills out a section on the registration application form giving you permission to register the vehicle in your name.