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Can I Insure A Car I Don’t Own?

Yes, it is possible to insure a car that you do not own; however, it is not as easy as going out and buying an auto insurance policy.  To get a traditional auto insurance policy, you have to have an insurable interest in the vehicle. An insurable interest typically is derived from ownership of the vehicle. However, some insurance companies will make an exception if you demonstrate a need to insure the vehicle.

Why Insure A Car That You Do Not Own?

If you drive a car often, you may want to have some auto insurance coverage in case you are involved in an accident.  Furthermore, if someone often loans you a vehicle to drive that person may require that you have auto insurance to protect you and their vehicle if an accident were to occur.  Let’s say, you are staying with your grandmother who does not drive much anymore, and she lets you drive her car daily. It would be wise for you to have some sort of insurance coverage because her auto insurance may not cover you as the regular driver of the vehicle.  You may be covered as a member of her household, but this is typically for occasional driving. 

Another example of a time when you may want to insure a car that you do not own is if your grandmother loans you her car for an extended period of time but you are not living with her.  In this instance, her auto insurance policy will not cover you as a member of her household. Furthermore, her auto insurance may not cover loaning out the vehicle for an extended period of time.  Thus, you may do not have coverage if you are in an accident unless you purchase some type of auto insurance.

How Do You Insure a Vehicle You Do Not Own?

You can insure a vehicle that you do not own the title for in three ways.  Firstly, you can have the owner of the vehicle add you to his or her insurance policy.  This is often the simplest way for you to obtain coverage. Secondly, you can purchase your own auto insurance policy and add the owner of the vehicle to your policy.  This may be the best option if you are the primary driver of the car but not the owner of the vehicle. Thirdly, you can purchase non-owner auto insurance.

The Owner of the Vehicle Adds You To Their Policy

If someone is willing to let you drive his or her car regularly and that person has insurance, see if the person will add you to the insurance policy.  Oftentimes, you must live with the owner of the vehicle in order to be added to his or her policy. Many insurance companies will not allow someone to be added to an auto insurance policy who is not a member of the policyholder’s household.  If you are a college student, however, and you are trying to insure your parents’ car, you can often use their address as your primary address for auto insurance purposes.

Purchase a Policy and Add The Owner of the Vehicle

You may be able to purchase an insurance policy and add the owner of the vehicle to it to demonstrate an insurable interest.  If you can show the insurance carrier that there is a need for you to insure the vehicle, some insurance companies will allow you to obtain a policy.  However, you may have to shop around with different insurance companies to find the right one.

It is important to note that under the laws of some states this may not be a viable option.  Some states require that the owner have auto insurance for a vehicle to be registered in the state.  Furthermore, states like New York require that the name on the insurance match the name on the registration.  Thus, the primary holder of the insurance policy must be the registered owner of the vehicle. California, on the other hand, does not require that the name on the auto insurance policy match the registration, so check your state laws to see if this is an option.

Purchase a Non-Owner Auto Insurance Policy

The purpose of a non-owner auto insurance policy is to add liability coverage for the non-owner driver.  This type of coverage does not include comprehensive or collision coverage which covers damage to the vehicle you are in.  The owner of the vehicle’s primary insurance policy should cover that type of damage. Non-owner auto insurance also covers uninsured/ underinsured motorist and medical payments in states where this type of insurance is required by law.

Non-owner auto insurance is for people who borrow a relative or friend’s car once in a while.  You will not qualify for this type of coverage if you have regular access to a vehicle. Therefore, of the two examples above, if you either live with your grandmother and drive her car or you live elsewhere and she loans you her car for an extended period of time, you do not qualify for non-owner auto insurance in either instance.  Furthermore, it is important to be honest about whether you have regular access to a vehicle when trying to obtain a non-owner auto insurance policy. If you are fudge this requirement, the policy may not cover damages in the event of an accident.

Several major auto insurance companies offer non-owner auto insurance.  These auto insurance companies include Geico, Progressive, and State Farm.  Other large auto insurance companies that offer non-owner auto insurance include American Family, Dairyland, Farmers, Liberty Mutual, Nationwide, Travelers, and USAA.

>>MORE: Non-Owner Car Insurance: Who Offers It? How Much Does It Cost?

Final Thoughts

Insuring a car that you do not own is not easy because your insurable interest may not be apparent to many insurance companies.  If you reside with the owner of the vehicle, you can be added to his or her insurance policy in most instances. However, if you do not, you may be able to demonstrate enough of an insurable interest in the vehicle to purchase a policy so long as you add the vehicle owner to it.  If neither of the above requirements can be met, a non-owner insurance policy is the best bet to protect your finances in the event of an accident. You can also try to get the owner of the vehicle to add you to the title as this would very clearly demonstrate an insurable interest.

>>MORE: Need SR-22 Insurance, But Don’t Own a Car

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