Car insurance policies do not typically permit insuring a vehicle not in your name due to insurance companies requiring that its primary policyholder and titleholder be listed on the policy as insurable interests – something not always possible when dealing with untitled cars.
There are, however, two ways you can work around this. Either you can add yourself as an additional interest or look into purchasing a non-owners policy.
Legal Ownership
Insurance companies usually prohibit offering policies on vehicles not registered to an individual who purchases insurance policies; this is because their requirements require that both title and registration names match those who purchase an insurance policy. There may be ways around this restriction depending on individual circumstances.
If a friend or family member gives you their vehicle and asks that it remains insured, becoming named driver on their policy could allow you to use their car when needed and protects them in case an accident claim should come up in your name. However, keeping this vehicle long-term may be unadvisable if your driving history is poor as this could put them at a greater risk; purchasing your own policy with transfer of title would be better option in such an instance.
Other scenarios where it may be possible to insure a car not registered to you include:
If you live with and frequently drive a vehicle owned by another, and often add them as a driver on their policy as an additional interest, this may reduce your costs but also demonstrates to insurance providers that you have a stake or insurable interest in it. It is also common practice for spouses or teenagers living under parental guardians to be added as additional interests on their policies – another way of insuring without changing ownership.
Lastly, if you know of someone with an excellent driving record and you are willing to purchase their policy on their behalf, it may be possible for them to buy car insurance even though their title and registration aren’t in your name. Though it requires more work on both parts, it provides coverage just like any other policy would do.
Overall, insuring a car that does not bear your name requires additional work and paperwork; however, you should carefully consider both sides of each scenario to decide if this option would serve your best interests.
Insurable Interest
When insuring something such as a vehicle or person, insurable interest must be demonstrated in order to be covered under an insurance policy. Without insurable interest in place, no policy would exist at all – making insurable interest a key element for purchasing any insurance policies at all.
An insurable interest typically refers to financial participation in an object of your policy, such as ownership or possession, though it could also mean deriving some benefit or gain from its continued existence – often known as “benefit of value.” For instance, Kelsey could take out an insurance policy on her friend’s car because her financial loss if it were destroyed would exceed any coverage paid out under her policy.
Notably, some forms of insurable interests are limited by law or by the circumstances surrounding a relationship. Spouses and minor children can usually obtain car insurance policies on each other because they’re considered beneficial to one another’s lives and wellbeing; but this option doesn’t exist among distant relatives since there’s no significant ties that link them together.
As Value Penguin notes, having insurable interest may make purchasing a car that is not registered under your name easier, though this won’t always work. Some states require that both registration and insurance have the same names on them – creating potential hurdles when trying to insure one that is not your own.
To overcome this hurdle, consider adding the nominal owner of the car as an additional insured on your policy – this won’t increase premiums and is an easy way to cover a vehicle that you don’t own directly. However, be mindful that any such action still require proof of insurable interest; should an accident or property damage occur that affects them alone without you involved, compensation might not come through to compensate you directly.
Additional Interest
When discussing insurance policies, additional interest and additional insured may often be confused as the two terms seem similar. But these two entities are quite distinct: an additional interest refers to any person or party who benefits from knowing there’s an insurance policy in place without necessarily needing coverage themselves; typically this would include third-party stakeholders like lenders and property managers with financial stakes in insured property whose interests would benefit from knowing about policy changes, cancellations and renewals as well as filing claims against the policy.
An additional insured is defined as someone who does not require coverage from an insurance policy but is given protection by their provider anyway. They can make claims against it and be covered under it, making this protection available on most car, home, condo and renters policies.
Additionally insured on their spouse or parent’s car policy is a common occurrence; this ensures that if something were to occur with their vehicle and no way was available to cover it, their other party is protected. Another example might include roommates or coworkers using an employer vehicle as part of their job and covering under its insurance. Doing this also keeps everyone aware if changes or updates need to be made regarding said policy.
An endorsement allows an additional interest and insured to be added to a policy quickly and painlessly, usually without impacting premium costs unless they become drivers on the policy as well.
Additionally, an insurance policy with additional interests can help keep others up-to-date about any changes that could impact them, particularly lenders or landlords who wish to remain aware of any ramifications for them. Doing this may prevent any misunderstandings later and ensure all parties understand exactly what coverage they’re receiving; discuss various insurance solutions with lenders and key players in your life so you can identify the optimal one for yourself.
Non-Owners Insurance
If you need to drive a car that isn’t your own, a non-owner policy could be the right option for you. Lenders or someone helping finance it may require that the name on the policy matches with that on the registration card/title; otherwise there may be ways for you to gain coverage; adding the owner as an additional driver on your policy, having its title transferred directly over, or getting a non-owner policy would all work as ways.
Family or friend insurance policies often allow additional drivers to be added as drivers on their policy, which can help bring down your own rates. Alternately, transferring title may provide fuller protection in the event that it gets stolen.
If you often borrow cars from friends or coworkers, then a non-owner policy could come in handy in an accident you cause. This type of coverage would cover any difference if the car owner only provides $25,000 worth of liability coverage; thus making this policy invaluable in these instances.
Some companies specialize in non-owners policies and may provide more flexible underwriting guidelines and offer better rates than their competition. It would be worthwhile speaking to these insurers directly about your options for non-owners policies.
Overall, insuring a car that isn’t registered to you can be a complex process. To simplify it and prove that you have an insurable interest, have the vehicle owner add you as an additional driver or co-owner and compare prices from various insurers before making a decision.