Most of the time, you cannot insure a car if you’re not the legal owner. If you borrow a friend’s car once in a while, their insurance covers you. However, that coverage does not extend to frequent use. If you regularly borrow someone’s car, they should add you to their coverage.
Other options include adding your name to the title or registration to purchase insurance. The best choice is a non-owner insurance policy that covers liability only on rare occasions.
Insurance for Non-owned Vehicles
You must have an insurable interest or a financial stake to insure a vehicle. Therefore, you’d suffer a loss (and become financially responsible) if the vehicle is damaged or totaled. It’s hard to show you’ll suffer a financial loss if you are not an owner. Some states require the insurance card’s name to match the vehicle registration’s name.
It’s up to the vehicle owner to insure a car. You can get coverage if the owner adds you to the policy as a driver, adds your name to the title or registration, or transfers the title to you.
If you can’t get traditional coverage, you can buy non-owner car insurance for a vehicle you don’t own. This liability insurance covers damage or injury to the other driver but not the vehicle you’re driving.
Why Is It Difficult to Insure a Vehicle You Don’t Own?
From a legal perspective, the owner of a car is the person(s) listed on the registration and title. Auto insurance companies issue policies to a car’s legal owner, so insuring a car is difficult when your name is not on the registration. Insurers want to reimburse the person with the insurable interest and minimize the risk of fraud. The owner must purchase the insurance if you regularly drive a friend or relative’s vehicle.
If you frequently drive someone else’s car, it’s understandable that you want to be covered in case of an accident. You can use workarounds for a car that is not yours, but getting coverage can be challenging.
It’s Hard To Prove Insurable Interest
As the owner or co-owner of a car, you have an insurable interest in it. You lose money if you damage the car in an accident. If your name is not on the registration, it isn’t easy to prove why you’re insuring the car since you don’t have a financial stake in it.
State Law May Prevent It
If you are not the legal owner, an insurer might not give you a policy because it complicates the claims process. There is a risk of fraud in paying someone who might not sign the check to the owner. In some states, like New York, the law requires the same names to appear on the vehicle registration and proof of insurance.
The Claims Process Would Be Tricky
Imagine being in an accident that totals a friend’s car that you insured. The insurance company notices the name discrepancy during an investigation and delays the payment. Or the company pays because you’re the policyholder, but you don’t sign the check to the car’s owner. Your friend would suffer a loss, despite being the person with an insurable interest.
Alternatives to Insuring a Car That’s Not in Your Name
Maybe you are a student who received a car from a parent or grandparent. Or you’re a grandmother who drives your daughter’s SUV when babysitting because it has the children’s car seats. If you frequently drive someone else’s car, it makes sense to protect yourself in case of an accident. While it’s difficult to purchase a policy, there are ways to get coverage for a vehicle that is not in your name.
Ask To Be Added to the Vehicle’s Title
If the vehicle’s owner adds your name to the title it establishes an insurable interest and makes you eligible to purchase insurance.
Opt for Car Rental Insurance Coverage
If you’re renting a car and you have auto insurance on your vehicle, see if your policy limits extend to rental cars. Your coverage must include comprehensive and collision insurance to cover damage to a rental car. If you don’t have insurance, or it doesn’t cover rentals, buy insurance coverage from the rental company.
Be Added as a Driver to the Existing Car Insurance Policy
It is easier to get added to the owner’s existing auto insurance than to buy a policy for a car you don’t own. This option works if the owner is a relative or roommate in the same household. Adding a driver to the policy will cause premiums, and insurance companies require you to have the same address as the policy owner.
Ask To Be Added to the Car Title
If you have already paid for the car in full, ask the owner to add you to the title as a co-owner. When you’re on the title and registration, you can purchase insurance for the car. If the car is a gift, or the owner will no longer drive it, such as with an elderly parent, ask the owner to transfer the title to you.
When Non-Owner Car Insurance Makes Sense
There are workarounds if you can’t get coverage under a traditional policy. These alternatives work for drivers who don’t own a car or insurance.
Non-owner insurance makes sense if you frequently use someone else’s car. This coverage can also be a step toward reinstating driving privileges if you have a bad driving history. Some states require non-owner insurance after a license suspension. Occasionally, drivers who don’t have a car get one to avoid a coverage gap, which could lead to higher rates. However, there are other specific instances where one should purchase an insurance policy for a vehicle they do not own.
Borrowing a Car From a Friend or Family Member
Automobile insurance generally covers your car when someone not on the policy drives the vehicle with your permission, otherwise known as “permissive use.” But there are exceptions to permissive use coverage, and not all policies allow it. With some policies, permissive use won’t cover a car if a borrower drives it more than12 times a year or uses it for business. College students who live away from home should have non-owner coverage.
Being Given a Vehicle as a Gift
In a typical scenario, a parent or grandparent gives a car to a young person and offers to keep it insured. Depending on the driver’s age and living arrangements, this may be appropriate. Add a child as a driver on your policy if the child is a minor, lives at home, and you own the car.
For an adult over 18 who does not live in the same household, transfer the title so they can purchase their auto insurance.