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Can you insure a car that’s not in your name?

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Jeffrey Johnson graduated summa cum laude from the University of Baltimore School of Law and has worked in legal offices and nonprofits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman University and worked in film, education, and publishing. His professional writing has appeared on sites like The Manifest and Vice, and he is the author of a novel ...

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UPDATED: Oct 28, 2021

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Key Takeaways

  • Insuring a car that’s not in your name is difficult and often not a good idea
  • One alternative is to add your name to a policy if you regularly use a car belonging to someone you live with
  • If you need car insurance coverage for a rental car, you can usually buy a temporary policy from the rental company

Whether you’re borrowing some wheels from a friend, driving a family car, or looking forward to a gifted vehicle, you’re going to need insurance to drive it legally. But can you even insure a car that’s not in your name? 

Unfortunately, the answer is no in most cases.

Of course, there are always exceptions, and usually, there’s an alternative to trying to insure a car that’s not in your name. Keep reading to learn about why it’s difficult to insure a car in someone else’s name, your options when it comes to driving someone else’s vehicle, and how to find the tools you need to make your time on the road fun, safe, and fully legal. 

Keep in mind that non-owner car insurance may sound like the answer, but actually only covers a driver and not a vehicle.

Once you figure out the best insurance for your needs, the best way to find a good deal is to get quotes from a variety of companies. You can enter your ZIP code into our search tool to find several car insurance quotes right now.

Is insuring a car that’s not in your name difficult?

Before you can get out on the road, the fact of the matter is: every car requires insurance. That said, you can’t usually insure a vehicle unless you’re the owner, and in many states, a car must be insured to purchase state registration.

What’s the main reason why it’s difficult to insure a car that’s not in your name? It goes against some guiding principles within the insurance business.

Those principles include:

  • Insurable interest
  • Insurance claims

What is insurable interest?

This surprisingly simple tidbit of industry terminology is at the heart of why it’s so difficult to insure a vehicle that’s not in your name.

Insurable interest refers to the investment (financial, emotional, time) an individual has in an asset. This investment means that if something were to happen to the asset it would be detrimental to their interest.

Hence, you have an insurable interest when it comes to your own car. If it’s damaged or destroyed, you suffer the negative consequences. But if you have no financial stake in a car — either because you don’t own it or the title isn’t in your name — then you don’t have an insurable interest and you’ll be unable to purchase liability car insurance.

How Insurance Claims Work

The purpose of insurance is to protect from major personal risk. 

Vehicles are the largest investment most people make, outside of owning a home, so there’s a large amount of personal risk that comes with owning one. You pay for insurance to protect from events like:

  • Accidents
  • Theft
  • Fires
  • Floods

If any of these events occurs to a vehicle, the insurance company typically pays for repairs, frequently with a lump sum delivered as a check. So, if you were to insure a vehicle that wasn’t yours, you would be the one to receive the cash payout in the event that the vehicle was damaged.

Insurance companies don’t want to risk paying nonowners or create complex loopholes where someone might be inclined to seek out a payout for a vehicle they don’t own.

What are som alternative options to insuring a car that’s not in your name?

If you’ve purchased or been gifted a car, the best path to insurance is transferring the title to your name. Barring a title transfer, there are a few more options to get you on the road. 

The following are a few common scenarios where you may think you need to purchase insurance but are, in fact, already covered.

Borrowing a Vehicle 

There are plenty of occasions where you might be behind the wheel of a car registered in someone else’s name. Whether you’re switching off on a road trip, running an errand for a friend, or borrowing a vehicle while yours is in the shop.

Typically, you don’t have to worry about not being on the insurance, or purchasing your own liability insurance for a vehicle you’re borrowing temporarily, thanks to a common rule attached to most insurance policies, known as “Permissive use.”

What is permissive use?

There are some key details to understand when considering whether you can borrow a car under the rule of permissive use. Consider these components of the permissive use clause:

  • Express Permission – Permissive use only applies if a car has been loaned out with express permission. If you haven’t been given the green light to borrow the car on a specific occasion and for a determined amount of time, you may not be operating under permissive use.
  • Liability – If you’re borrowing a car and get into an accident, the owner of the car may be liable for the damages, under permissive use. Always use caution while driving, especially when it’s not your vehicle.
  • Who Can Use It  – Typically you don’t need to share a residence to be included under the permissive use clause. That said, if you’re driving a car that’s not in your name every day, you’re no longer operating under permissive use and may need to seek out other options.

Driving the Family Vehicle

If you’re living at home or have a family member living with you, you may be wondering if you need to purchase your own insurance to drive their vehicle. Most often, people who share a household can be placed on existing insurance policy plans to keep everyone covered.

If you’re looking to drive a parent or relative’s parked car in your driveway that’s not in your name, the easiest option is to be added under their coverage. Here’s how:

  • Insurance Companies Expect It – Most auto-insurers expect you to add members of your household to your auto insurance policy. It’s a common practice to inform your insurance agent of who has access to family vehicles.
  • Fill In The Details – Insurance companies will request a number of details about the prospective new driver in your household. Name, age, and date of birth, plus occupation, and driving history will be requested. It’s against the law to knowingly misrepresent yourself to an auto insurance company, so provide details as accurately as possible.
  • Fees and Premium Costs – There’s typically a one-time fee when adding someone onto an existing insurance plan. As well, insurance premiums may increase when drivers are added.

Be mindful that your driving record will impact the insurance premiums for any policy you’re listed under. The benefit is, the longer you go without an accident, the lower your premiums will be. So, keep your eyes on the road and check your blind spots.

Insurance for Company Cars

If you work for a business that offers you a vehicle as part of your benefits package, you may be uncertain about your car insurance situation. Typically company cars work like this:

  • Employer’s Cover The Insurance – Because your employer is the one with insurable interest (they own the car after all), they’re the party responsible for insuring the vehicle.
  • Your Name Is Attached To The Vehicle – Though your company pays for the insurance, your name will be attached to their auto insurance coverage. You may be accountable for a company car, despite the fact that your name isn’t on the title.

In the case that your company car is damaged or stolen, inform your employer through the proper channels, fill out any necessary paperwork, and sit tight — hopefully they have another car for you in the meantime.

Rental Cars

If you’ve rented a car before, you’ve most likely had the option to purchase a form of temporary car insurance coverage to protect you from financial risk while you’re using the motor vehicle.

While rental cars are all insured by the rental company, most car rental companies offer their own variation of car insurance for the rentee.

That means you don’t need to worry about purchasing a policy, or doing any major research before renting a vehicle. The biggest question you have to ask yourself is how confident you are that you’ll return the rental untouched. If you’re hesitant, it’s suggested that you take their offer and pay a little extra for the auto insurance coverage.

Purchasing Non-Owner Car Insurance

While not the same as purchasing insurance for a car that’s not yours, non-owner insurance is a form of policy that can cover you if you’re a frequent driver but don’t own any motor vehicle.

No-owner car insurance coverage protects you against lawsuits and liability and can help cover:

  • Medical bills
  • Property damage
  • Repair bills
  • Legal protection

As much as we wished accidents didn’t happen — sometimes there’s no avoiding them. If you find yourself in an unfortunate situation with a car that’s not in your name, you can rest easy knowing you’re covered with a non-owner car insurance policy.

Get the Best Car Insurance Policy for a Vehicle You Don’t Own

While it might be hard for you to insure a car that’s not in your name, we’re confident that you’ll find a way to get back on the road with all the information we’ve listed so far. Of course, you’re going to need insurance if you’re getting into the driver’s seat.

So sit back, relax, and let us do the hard work of finding an insurance policy that fits your situation.

We offer unparalleled options for all your insurance needs — all at the click of a button. While insuring a car that’s not in your name can be pretty difficult, getting an insurance quote doesn’t have to be.

Get free quotes today with our search tool and you can be driving safely and legally tomorrow.

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