Although it's not a regular occurrence, there are several reasons you might want to insure a car that you don't own - perhaps it belongs to a family member, but you're the only one who drives it. In most cases, the titled owner of a car is also the one who insures it. Car insurers want to know that the primary policyholder has an insurable interest in the certifying vehicle.
The term "insurable interest" refers to having a cause to insure a car. The explanation is self-evident if you own the vehicle: it's your investment. Thus you have a vested interest in preventing it from being damaged or destroyed.
If you don't own a car, proving your insurable interest is more complicated. Car insurance providers will be suspicious of fraud when you try to insure a vehicle you don't own and will be significantly less likely to let you take out a policy. However, just because you can't get coverage on a car you don't own doesn't mean you don't have options.
- You can't usually insure an automobile you don't own since you don't have "insurable interest" in it.
- Co-titling the vehicle and adding yourself as an owner is another possibility.
- Non-owner insurance, which covers you for liability when driving a car that isn't yours, is another option.
Is it possible to ensure a car that I don't own?
As previously stated, it's nearly hard to insure an automobile you don't own because insurance companies require proof of an insurable interest in the vehicle. It's unlikely that you'll be able to locate an auto insurance provider ready to cover you if you can't prove you have a financial stake in the vehicle.
How do prove insurable interest?
When you apply for auto insurance, you may be required to present your vehicle's registration or title, often known as a pink slip, an official document that states who owns a car, to show your insurable interest. However, if you don't own a car, proving to an insurance company that you have a real purpose for covering it is more complicated.
Other coverage options for a car that's not in your name
You will not be able to insure a car you do not own unless there are unique circumstances. You may, however, have a few other possibilities.
Co-title a carThe term "co-titling" refers to adding a second owner to a vehicle. Each state's Department of Motor Vehicles (or equivalent institution) has distinct criteria. Still, you'll almost certainly need to jointly apply for a new title to add an owner to a car.
Filling out a form with the names and information of both drivers who will be included on the title, paying a fee, and going to the DMV to sign the new title are usually the steps involved. If the car were purchased with a loan that hasn't been entirely paid off, you'd need to contact the lienholder to see if a second owner can be added to the title.
However, once you've been added to a car's title as a co-owner, you're free to purchase an insurance policy. You can be the principal policyholder as a business owner. However, any other owners should be named on the car insurance policy as well.
- Adding a named insured to an auto policy
An insurance provider may require you to be listed as a named insured on their auto policy if you live with someone and frequently drive their vehicles, such as a roommate or family member. Every driver in a home should typically be listed as a named insured on a policy. Online or over the phone, you may be able to add a new named insured to your policy.
While you may not be able to cover a car you don't own, you can look into non-owner auto insurance if you want to protect yourself as a driver. Non-owner insurance is a form of pared-down automobile insurance policy ideal for drivers who frequently rent or borrow cars.
Non-owner insurance frequently consists solely of liability coverage, which is the foundation of most insurance plans. Personal injury protection, which covers your medical expenses if you cause an accident, and uninsured/underinsured motorist coverage, which protects you if you're in an accident caused by a driver who doesn't have insurance or whose insurance doesn't cover the full extent of the damage, are both optional coverages.
Non-owner insurance, on the other hand, does not include coverage geared to protect your car, such as collision and comprehensive coverage, because there isn't one to save. However, if you frequently drive a vehicle that doesn't belong to you, non-owner insurance may be a more practical option than obtaining car insurance for a car that isn't in your name.
Do you need insurance to drive someone else's car?
Car insurance usually follows the vehicle rather than the driver. If the car's owner permits you to drive it, you'll be covered under their vehicle insurance policy's "permissive use" clause. An insurance provider may demand you to be added to their auto coverage if you reside with the car owner. If you frequently drive other people's automobiles, you might think about getting non-owner car insurance coverage.
Can I register a car without insurance?
When registering your car with your state's Department of Motor Vehicles or a comparable agency, you may be required to produce proof of insurance, depending on where you live. Proof of insurance, your insurance ID card, motor policy declarations page, or digital insurance card, is usually due within 30 days. Even if your state is one of the two that does not require auto insurance, there may be other processes you must complete before driving your new vehicle.
Can insurance and registration be in different names?
Suppose you can prove insurance interest in a car and buy a policy for it even though you're not the owner. The registration and insurance can be under different names, but the exact vehicle depends on your state. However, as previously said, getting insurance on a car you don't own is complex, and many insurance companies will refuse to write a policy for anyone who isn't the vehicle's owner.