How to get coverage for a car you do not own
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There are a few situations where you might want to insure a vehicle that’s not in your name. For example, maybe you drive a family member’s car regularly, or maybe you received a car as a gift and it’s registered in the giver’s name. Insuring a vehicle in these circumstances can be tricky. We’ll walk through when you can and can’t insure a vehicle that’s in someone else’s name.
In most cases, you cannot insure a vehicle that is not titled and registered in your name. However, there are exceptions. To understand why, it helps to know a little about how insurance works.
When an auto insurance company writes a policy, it wants to know that the policyholder has a stake in keeping the vehicle safe and in good condition. This is known as insurable interest.1 It’s a core part of how auto insurance works. Normally, you can prove insurable interest easily by producing a title and registration for the vehicle in your name.
When someone files a claim, the insurance payout goes to the policyholder. So, let’s say a car insurance company allowed you to hold a policy for a car you didn’t own, like your friend’s car. If you hit a tree, you would get the insurance money, even though you have no financial stake in repairing your friend’s vehicle, or insurable interest in the vehicle. That’s why, in most cases, you cannot insure a car that’s not in your name.
If you’re trying to insure a vehicle in someone else’s name, you’re not out of luck. There are several ways you can get coverage.
If you live with someone and drive their car frequently, they should add you to their auto insurance policy.
If you receive a car, the person who owns the car should transfer the title to you. In most states, you will not have to pay sales tax. If the gift-giver financed the vehicle in their name, you can return to the dealership or financial institution together to co-sign or transfer the loan. Then, you can register and title the car in your name, and buy auto insurance easily.2
When someone gives you a car, the easiest way to insure it is to ask them to transfer ownership to you and then to purchase auto insurance normally.
If you give a vehicle to your minor child who lives with you, you may be able to keep the car insured on your policy and list the child as a vehicle owner. Insuring a teen driver can be more expensive because auto insurance companies consider them high risks. That’s why we’ve found the best auto insurance options for teens.
If you have your own auto insurance policy, including collision coverage and comprehensive coverage, it often extends to rental cars as long as you rent the vehicle for personal use and stay within the U.S. and Canada. Before you purchase additional coverage at the rental car counter, check your personal policy to avoid paying for duplicate coverage.3
Some credit cards offer rental car insurance when you use the card to pay for the rental. This coverage is typically secondary to what your auto insurance company offers if you have a personal policy.
If you drive rental cars frequently but don’t own a vehicle yourself, non-owner insurance could be a good idea. Some auto insurance providers even offer stand-alone rental car coverage.
It’s usually OK to borrow someone’s car on occasion, as long as you have their consent to drive the vehicle. If you get into an accident while driving a borrowed car and don’t have your own auto insurance policy, in most cases, the car owner’s policy will cover you.
If you have your own policy, which insurer pays will depend on who was at fault in the accident and your state’s fault system. Learn more about liability coverage vs. no-fault systems or what to do if a car accident was your fault.
In most cases, you cannot insure a car that is not registered and titled in your name. Instead, you may apply for a co-title, ask the owner to add you to their insurance policy, or purchase non-owner insurance. To learn more about the ins and outs of auto insurance, head over to our auto insurance FAQs, or read about registration and insurance in Florida or insurance and registration in California.
Glossary Of Insurance Terms And Definitions. Geico. (2022).
How to Give a Car as a Gift. Edmunds. (2017, Jan 23).
Should You Buy Extra Rental Car Insurance At The Counter? Allstate. (2020, May).