Can You Insure a Car That's Not Under Your Name
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If you're looking to insure a car that's not in your name, you probably won't be able to, but there's a bit of nuance involved. In most cases, you'll find yourself going through a lot of trouble if you try to insure a car in someone else's name, according to Policygenius. Fortunately, there are some instances in which it's appropriate, such as certain scenarios in which you drive a car owned by another family member. 'Can I insure a car not in my name?' you might ask. Learn everything you need to know about insuring a car in someone else's name.
Insurable Interest
Above all else, insurance companies look for insurable interest when crafting policies. Put simply, insurable interest is valid motivation someone might have to get insurance for a vehicle and keep it in good condition. Being the owner of the vehicle qualifies as insurable interest as the motivation is that the car was an investment for the owner. If you don't own the vehicle, insurance companies are typically a bit wary since that tactic is so often used for fraud according to Policygenius.
When you apply for car insurance, you'll have to provide some kind of insurable interest. This typically takes the form of car registration or car title, also known as a pink slip. When you don't have the vehicle's pink slip, demonstrating insurable interest is a bit tougher. Even if you are able to secure insurance, there's typically a downside for the car's owner. The owner of the vehicle will likely have to deal with a lapse in insurance, and that can increase premiums for the owner since insurance companies see that lapse as an increased risk, according to Value Penguin.
Before you even pursue proving your insurable interest, you need to make sure that getting insurance for a car that's not in your name is even possible. According to Value Penguin, some state laws prevent this practice entirely. In these states, insurance and registration tend to work together. New York, for example, won't let you register a car unless you have insurance for it. Inherited vehicles should already have someone else's insurance on the vehicle, so there's no need to insure a car that you don't own in that case since it's already covered.
Co-Titling
One of the ways you can insure a car you don't own is to gain partial ownership first by co-titling the vehicle. This means adding your name as a partial owner to the car's title. While every state has different requirements for this, according to Policygenius, you and the car owner will likely have to jointly apply for a new title together. This application involves filling out the form, paying a fee, and going to the DMV to sign the title in person.
In some instances, co-titling may be impossible. This is generally the case if the vehicle hasn't been paid off yet. You can always appeal to the source of the loan to see if co-titling is possible, but that's not often the case. Should you be able to obtain a co-title, you can easily add an insurance policy to the car as your co-ownership ensures insurable interest.
Keep in mind that there are some downsides to this method. While it can be useful if you and the other owner share a residence and you drive the car often, The Zebra explains that insurance premiums will always increase when someone else is added to the policy. In fact, some insurers don't even allow joint insurance unless the people listed on the policy live together. This is because one of the major factors insurance companies use to gauge risk is the ZIP code since each area has different risks, including the odds of hitting a deer.
Additional Interest
If you're looking for the easiest way to insure a car that's not in your name, you can add the owner of the vehicle to your insurance policy as an additional interest. When you do this, your premiums will not increase as it merely states someone else's insurable interest. Just remember that the owner or the bank, depending on whether the vehicle is paid off or not, will be the one receiving the claims check should any damage occur in an accident.
Non-Owner Insurance
There are specific insurance policies designed for this scenario, and they're known as non-owner insurance policies. These policies exist to cover those who drive someone else's vehicle every now and then and don't have any insurance themselves. While this is a fairly easy way to get insurance, it's essential to consider the amount of coverage you can get.
Coverage under a non-owner insurance policy is severely limited. Only liability coverage is included, which is the basic backbone of every insurance policy. There are opportunities to add personal injury protection in some circumstances along with uninsured motorist insurance, but that's typically the full extent, as Policygenius explains. Collision and comprehensive coverage or anything designed to protect the vehicle itself isn't included.
How to Ruin Your Car Insurance
Getting insurance for a car that's not in your name can be a hassle at times, but it's much better than the alternative, being uninsured. Insure.com has listed a few mistakes people too often make that can ruin their car insurance:
- Not adding new drivers: If someone in your household, such as a teenager, recently received their driver's license, your insurer needs to know about it. Considering how costly car insurance is for a teen, it can be tempting to not mention it, but the penalty can increase premiums even more.
- Not mentioning a move: Imagine your child is ready to go off to college. They take the car with them for the move and you don't tell your insurer. Given that the car is primarily being driven in a different ZIP code, the insurance considerations are different. Failing to mention this change can lead to penalties.
- Keeping insurance after selling: If you sell or gift your car to your teen, such as any of these great options, they'll have to get an insurance policy of their own as the new owner. You can co-title with them if necessary or add them to your policy, but you can't expect your policy to carry over without an update.
With these factors in mind, you'll be in a better position to insure a car that's not in your name. Just remember that the titled owner is almost always the one who needs the insurance, as Policygenius describes.
Information and research in this article verified by ASE-certified Master Technician Duane Sayaloune of YourMechanic.com. For any feedback or correction requests please contact us at research@caranddriver.com.
Sources:
https://www.policygenius.com/auto-insurance/can-i-insure-a-car-thats-not-in-my-name/
https://www.valuepenguin.com/car-insurance-car-not-registered-to-you
https://www.insure.com/car-insurance/horrible-decisions-mess-up-car-insurance.html
https://www.thezebra.com/auto-insurance/vehicles/insuring-car-you-dont-own/
https://www.caranddriver.com/features/a22625945/these-are-your-odds-of-hitting-a-deer-in-each-state/
https://www.caranddriver.com/shopping-advice/a22563787/best-first-cars/
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Can You Insure a Car That's Not Under Your Name
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