Can you insure a car you don’t own?

Last modified: March 19, 2021

Can you insure a car you don’t own? You probably haven’t even thought that such an option exists. Yet, in the vast world of insurance, there is always something new to discover. The answer is indeed a bit complicated but to put it simply – yes, it is possible.

The next logical set of questions would probably be ‘’Why would you insure someone else’s car?’’ and ‘’What does this entire process look like?’’.

If you are curious to find out, we’ve gathered everything you need to know about insuring a vehicle that you don’t own.

Insurable Interest – What Motivates You to Insure Someone Else’s Car?

When you want to insure a car you don’t own a lot of companies will first think about insurable interest. The insurable interest represents a type of investment that protects anything subjected to financial loss.

Insurable interest represents the basis of all insurance contracts. The insurance interest represents your drive behind the decision to insure. When you are insuring your own car, your motives are clear – you want the best protection for your four-wheeler.

Insurance companies want to ensure drivers with clear intentions about the vehicle, who do not pose any risk of potential insurance fraud. This makes the entire process more complicated. 

Depending on our personal situation, you have few options to consider.

How Can You Insure Someone Else’s Car?

Most insurance policies are under the name of their holder. Yet sometimes extraordinary situations happen and insurance companies need to think of the best ways to get the most of your policy. 

You just need to find a way to persuade insurers of your financial stake and your interest. You need someone else’s car to get to work? You are getting a car as a gift?

These situations are numerous but in the end, you must be honest about your intentions with your insurer. Lying is illegal and it can get you in serious trouble later. 

Some of the ways of insuring a vehicle, not in your name are:

  • Adding yourself to the owners insurance policy 
  • Adding car owner to your insurance policy
  • Buying non-owners insurance
  • Demonstrate and explain your need for the vehicle in great detail 

We will explain each one in detail so you can check which option fits you the best and you can start looking for the best insurance for your state. We will also mention state limitations to help you avoid unpleasant surprises.

Adding Yourself to the Owners Insurance Policy

This option is most likely to be accepted if you are living at the same address as the vehicle owner and you are both using the vehicle. Most insurance companies would decline this type of insurance if you are not sharing the residence with the vehicle owner.

Also, a serious downside is that insurance premiums may vary with different ZIP codes. Every ZIP code has different risks and it could be a red flag for insurance companies. This way of getting car insurance for someone else’s car will cost you more.

Unfortunately, you can’t split the bill – it does not work that way. Based on your driving history and other factors – the rate will increase.

When to consider adding yourself to the owner’s insurance policy? 

If you are living at the same address as the vehicle owner, you may want to consider this option. Also, it is important to mention that students living on campus can consider this option.

Adding Car Owners to Your Insurance Policy

Getting another way around and adding a car owner to your insurance policy as an additional interest. This solution is not frowned upon by most car insurance companies. But if that is the case with your current company, maybe it is time to find another car insurance company which offers more flexibility.

Adding a car owner to your car insurance policy is probably the easiest way to insure a vehicle you don’t own. And contrary to option one – you don’t need to live at the same address. The insurance rates won’t change significantly either. Consider this as some sort of a loan of the car – although the car owner is not using it, it still has a significant financial stake. 

When to consider this option?

If you want to save money and you are not living with a car owner – this option can be the least complex and the least pricey.

Buying Non-Owners Car Insurance: How Does It Work?

Non-owners insurance applies to those who drive someone else’s vehicle from time to time. This insurance option is a sound investment because it is covering the individual that is using the vehicle, not the vehicle itself.

In case of an accident this insurance is covering the following:

  • Medical expenses and bodily injuries of others caused by you.
  • The property damage you caused is covered as well.
  • You are also covered from the legal side if you are sued for causing the accident.

What non-owner insurance is not covering:

  • Collision and comprehensive insurance are not included in the non-owners policy, so they won’t cover the damage to the car you are driving.
  • You can’t cover your business car with a non-owners policy. If you are working, for example, in delivering service – you won’t get this type of insurance.
  • Your injuries and personal belongings won’t be covered with this type of insurance.

When to consider non-owners insurance?

Consider non-owners insurance when you are renting a car often and if you are using car-sharing services often. This is also very practical if you, for example, work as a nanny and you are using a car from your employer, for example, to pick up the kids from school.

And the Hardest Option…

Communicating your need to the insurance company is one that is the most complicated option but may work in some cases. If the ideas from above seem impossible – you can make a case for your insurer. 

Try explaining that you will drive the car every day. Describe your situation in the greatest detail possible. Can you afford to own a car? Why do you need to use the car every day? Is public transportation so bad?

When to consider this option?

Only if you are out of the other options, try keeping it simple

How Much Does It Cost to Insure a Vehicle That I Don’t Own?

It will not break your bank and cost you more than regular insurance but it depends on the numerous factors out there. It depends on your zip code, insurance premiums, your driving history – take every detail into consideration before finding the most affordable option. 

State Limitations 

In some states – the legal requirements are clear that the registration and the insurance need to go hand in hand. It might be legal in some states, but it still can be complicated and burdensome for the car owner.

For example, in the state of New York, the name on the registration and the insurance policy must match. If not, you risk getting your registration suspended.

In the state of Indiana, you don’t have this option. You need to apply for the brand new title. You can’t share the policy for the vehicle in question. If you are leasing the car – you will need to contact your leasing company. 

When it comes to California – the names on registration and your policy don’t need to match. Yet it is required for every vehicle to have car insurance prior to registration.

 

In Conclusion

Can you insure a car you don’t own? Yes! It’s sometimes complex and it varies on the situation you are currently in but if you need the insurance coverage, it is worth trying. Find the best option that will be great for both you and the car owner.

There are plenty of insurance companies experienced in these types of situations. The most crucial thing is, to be honest about your true intentions because lying to your insurer can leave you with lasting damage.

FAQs

Who owns a vehicle when two names are on the title?

Both names on the title are the legal owners. Yet there is a small detail you need to pay attention to – if the word “and’’ stands between the names – both titleholders need to sign the agreement if the car is going to be sold. If the ‘’or’’ stands between the names – either one of them can sign the agreement. 

 

Does it play a major role whose name is first on a deed?

No, it doesn’t play a significant role.

 

How do I take someone's name off my car title?

Check if the title has ‘’and’’ or ‘’or’’. If it states “and” – you will need another person’s permission and if it is written ‘’or’’ – you can remove the name without another person’s permission. If you are removing the other person’s name from your title – visit your local DMW to get the new title.

Does my co-signer have to be present when selling a vehicle?

It depends on what it says on your title as well as laws in your state.

Can you insure a car you don't own?

Yes! It’s sometimes complex and it varies on the situation you are currently in but if you need the insurance coverage, it is worth trying. Find the best option that will be great for both you and the car owner.