UPDATED: APRIL 27, 2023 | 3 MIN READ
If you don’t own the vehicle or don’t have the vehicle registration with the DMV, you can’t purchase a car insurance policy on the vehicle in most circumstances. However, there are some exceptions to the rule of insuring a car that is not in your name.
When Can You Insure a Vehicle You Don’t Own?
There are exceptions to purchasing an auto insurance policy while you don’t own the car. These policies are usually called non-owner car insurance and are only liability policies. These policies are for when you have a financial interest in the vehicle or regularly borrow someone else’s car, such as a friend or family member.
A non-owner car insurance policy typically only covers additional liability coverage. The vehicle owner would still need to have the primary insurance on the vehicle.
You have an insurable interest in the car.
Insurable interest would be when you have a financial stake in the car’s condition. Such as when a couple lives together and shares a vehicle, but only one person holds the car title. Car insurance companies would consider this insurable interest.
They could issue a non-owner car insurance policy to help with any liability that would be more than the primary auto insurance policy amounts.
Non-owner car insurance policies
A non-owner auto insurance policy is not a stand-alone policy. According to the Department of Motor Vehicles, the state requires the registered owner to obtain primary auto insurance coverage.
The non-owner car insurance doesn’t include personal property or comprehensive coverage options, also known as full coverage. This type of auto policy mainly covers liability coverage, medical coverage, and personal injury protection.
Do You Need To Insure a Car You Don’t Own?
Your auto insurance coverage includes any motorist permitted to drive your vehicle if you haven’t expressly excluded them from the policy. That motorist must have a legal driver’s license, whether they have an auto policy or not.
Renting a vehicle
When renting a vehicle without a personal auto insurance policy, one must purchase car insurance coverage with the rental car company to cover any damage that may occur while in possession of the vehicle. If you have auto insurance coverage, your policy coverages will cover rent cars with the same limits as your car.
Borrowing a vehicle from family or a friend
Many times members of a family use each other’s vehicles. In the case of parent and child, the parent is the owner of the car and adds the child to their car insurance policy. When your child becomes a co-owner of the vehicle, they can also be added to the car title and remain on the parent’s auto insurance policy.
When driving a friend’s car, with permissive use once in a while, you would likely not need the additional non-owner car insurance policy. If you use your roommate’s car regularly, it would be wise to invest in supplemental liability insurance in case you’re in an at-fault accident.
You purchase a vehicle as a gift.
It’s easy to purchase a vehicle as a gift for a spouse or child. You can title and insure the car in your name and add them to your insurance policy. If you’re purchasing a vehicle for a friend, it’s a bit more complicated.
The car must have the new title issued to the purchaser, and you must also purchase an auto insurance policy for registering the vehicle with the DMV. You would then have to transfer the title to the person receiving the car, and they would need to purchase their own auto insurance policy.
You’re driving a company car.
When you’re driving a company car, the company should have a full coverage insurance policy on the vehicle. However, most don’t cover an accident if a company car is driven for personal use after hours.
Your private auto insurance policy probably has an exclusion that will not cover accidents in a company-owned vehicle. In this instance, you should have non-owner automobile insurance coverage.
How Do Claims Work When You Don’t Own the Vehicle You’re Driving?
If you have permission from the car owner to drive their vehicle and are in an accident, the vehicle owner would file the claim on the owner’s car insurance policy. It would be convenient at this time to have a non-owner auto insurance policy to help cover the insurance cost of the damages.
The insurance provider would pay the claim settlement to the owner of the car, not the driver by their insurance provider.
FAQs
Does the car have to be in the same name as the insurance?
Yes, the auto insurance policy must be in the same name as the vehicle owner.
Can you add a car you don’t own to your insurance?
On a standard auto insurance policy, you must insure your vehicle. If you don’t own the car, you can only purchase non-owner auto insurance, which is a minimal policy.
Can someone insure a car that’s not in their name?
You can insure a car if it’s not in your name, if the insured is also listed on the car’s title or vehicle registration as a co-owner, or if you’re purchasing a limited non-owner policy.
What is the process to add a car not in my name to my insurance?
To add a car not in your name to your insurance, you must first show insurable interest in the vehicle. You can also add the person who holds the title and car registration to your auto insurance when you add the car.
What is the process for adding someone else’s car to your insurance?
As the policyholder, you need to add the person who owns the car and the vehicle to your insurance policy. When adding them, you should get an auto insurance quote to see how much the car insurance rates will be. Depending on their driving record, the insurance premiums can change significantly.
What are the advantages of insuring a car is not in one’s name?
If you have a non-owner auto insurance policy and have an accident in someone else’s car, you would have coverage for liability and injuries under your auto policy coverage.
Can I insure a car that’s not in my name?
You can if you add that person to your auto insurance policy. Otherwise, you would need to get a non-owner auto insurance policy. However, it would not cover property damage or comprehensive coverage of the vehicle.
What is the difference between the car being in your name and not?
When the car is in your name, it shows you have an insurable interest. Insurable interest means you are interested in maintaining and caring for the vehicle to auto insurance companies. Loss of its value would affect you financially.
There are so many variations in the situations of owning and driving vehicles. Here are also many variations of auto insurance policies. In this way, auto insurance companies can ensure the right policy for your needs.
