Can I Insure A Car Not In My Name?
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Driving a car not in your name can be tricky when you do not have car insurance. Insurance laws are clear that everyone must have coverage on the road. So, how does this work in your unique situation? There are ways to insure a car not in your name and we want to show you how.
I have seen many individuals make simple mistakes in my nine years of experience as a licensed insurance agent; I am here to assist you in avoiding them. All it takes is knowing how the system works and that is what I aim to teach you through our time together in this piece.
Key Takeaways
You can insure a car not in your name if you have an insurable interest in the vehicle.
Ways to insure a car not in your name are getting a co-title, being added to the owner’s car insurance, or purchasing non-owner car insurance.
If a friend only drives your vehicle on occasion, you do not need additional insurance; they may be covered under an insurance policy’s permissive use provision.
Can I Insure A Car Not In My Name?
Under normal circumstances, you cannot insure a car that is not in your name. However, there are certain situations where a driver can obtain car insurance on a vehicle they do not own. Some are being the regular driver of a borrowed vehicle, or you are a caregiver and you use the client’s vehicle.
NO INSURANCE? Only seven states do not require insurance to register a vehicle. Mississippi, New Hampshire, North Dakota, Tennessee, Virginia, Washington, and Wisconsin.
Ways To Insurance A Car That You Don’t Own
We have just mentioned two ways to insure a car that you don’t own. And while there are obstacles that a driver needs to go through, there are means to obtaining car insurance. Let’s review them.
Getting A Co-Title
This method involves gaining partial ownership of the vehicle. You add your name to the title and you and the other driver own the vehicle together. This does require filing out a form, paying a filing fee, and signing forms in person at the DMV. One stipulation is that the vehicle must be paid off. Co-titling ensures insurable interest and enables you to obtain insurance more easily.
Get Added To The Policy
If you are the one without insurance, you can be added to the owner’s policy. The easiest way for this to happen is if you live in the home. If you live elsewhere you need to have an insurable interest. This can happen if you are helping a family member who no longer drives, or a student using a parent’s vehicle but living away from the home. This will, however, increase the owner’s rates.
Additional Interest
One method of insuring a vehicle not in your name is to add the owner of the vehicle to your policy as an additional interest. This is basically making them a lien holder. It helps because it does not increase your insurance rates, but if you were to file a claim on the vehicle, the insurance payout would go to the them since they are the vehicle’s owner.
Non-Owner Car Insurance
This is having blanket car insurance for whatever car you intend to drive. It is intended for individuals who do not have a car of their own. It provides them with liability insurance for damages when they are at fault; you can select higher limits depending on which state you live in. Should the damages exceed your coverage you would pay them out of pocket.
Rely On Permissive Use
This method is best if you only use the vehicle on occasion. The thought behind this method of getting insurance is basically to do nothing. An insurance policy allows a certain amount of leeway when it comes to other licensed drivers driving without being on an insurance policy. However, this leash is short. If you drive more than two or three times a month, permissive use is not the way to go.
ON THE RECORD: If you have a speeding ticket or other violation on your record, some methods may not be as viable as they can increase your rates. The national average is 24% according to Forbes Advisor.
What Is Insurable Interest?
Insurable interest is one’s motivation to purchase and keep an insurance policy on their vehicle. According to Forbes, 92% of households own at least one vehicle. Evidence of this financial stake could be proof of ownership, such as a vehicle registration. When one owns a vehicle, they are more likely to keep and maintain auto insurance, thus insurance companies are more likely to pass on the benefit in the form of lower rates.
NOT INSURED? According to the IRC, in 2022, 14% of U.S. drivers were uninsured. The increase of over 11.9% in 2021 is thought to be the pandemic when drivers chose to forgo car insurance.
How To Insure A Car Given As A Gift
If you are receiving a car as a gift, then the easiest way to insure the vehicle is to transfer it into your name. With your name on the title, you won’t have the obstacles you would have by leaving it in the gifter’s name.
However, if you are a minor, another option would be to keep the vehicle on your parent’s policy and add yourself as the owner. But if you are an adult, it would be best for you to purchase your own policy and ensure the transfer is done quickly.
How To Insure A Rental Car
If you are driving a rental vehicle there are a few ways to insure the car for your protection. The first is by signing the additional protection the rental company offers. This will usually come at an added expense.
Another option is to check with your auto insurance company. Your coverage will often carry over to your rental. Understand that this coverage will be limited and not be to the full extent that your auto insurance carries.
The third is to check with the credit card company you purchase the rental with. They will often extend insurance for a rental purchase.
CHARGE IT: When placed on your credit card, you can have automatic coverage that could save you money from the added supplemental insurance the company tries to have you purchase. Some coverages have typical values from $50,000 to $75,000.
How To Add A Car To Your Policy If It’s Not In Your Name
Under most circumstances, one cannot add a car to their policy if it’s not in their name. However, there are exceptions to the rule. If you can prove that you have “insurable interest” in the vehicle and that the vehicle’s loss would cause you financial loss, a car insurance company may consider extending a policy.
Other options if you cannot prove insurable interest are: adding your name to the title or having it transferred to you; purchasing a policy on the vehicle that covers both you and the owner (or adding the owner to the existing policy); or asking the owner to add you to their policy. You can also purchase non-owner insurance which enables you to have liability coverage in the event of an accident.
Can Someone Else Register My Car In Their Own Name?
This works similarly to what we have discussed, the simple answer is, yes. If you are permitting them to use your car or selling it to them. This would depend on which state you reside in. The purchaser would need proof of ownership, a permission letter, power of attorney, or a title transfer letter. This can usually begin with a signed title by the seller and purchaser.
FAQs
Does a car have to be in the name of the insurer?
Not always. It does make getting insurance easier, but all one has to do is prove insurable interest in the car to buy car insurance.
Can I insure a car that’s in my parent’s name?
Yes. If you are younger, you can be added to your parent’s policy, it is generally cheaper because you will trigger discounts. However, if you are older, it may be to your benefit to purchase your own policy, especially if your record is clean.
What’s the difference between an insured driver and a listed driver?
There are three main types of covered drivers on an insurance policy, the named insured driver, a listed driver, and a passive user. The insured driver is the name on the policy. A passive user is someone who occasionally uses the vehicle whose name does not appear on the policy and who does not live at the same address. A listed driver is on the policy who lives in the residence and has access to the vehicle.
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