By Tim MaxwellCan You Insure a Car You Don’t Own?
Quick Answer
You generally can insure a car that’s not in your name, but it can be complicated. Non-owner insurance may be an option. However, this coverage follows the policyholder and not the car they’re driving.
If you borrow someone's car regularly, you might wonder: Should I get my own insurance for the car? It might seem like a good way to save the car's owner money on insurance costs and hassle if you're involved in an accident.
In reality, however, getting coverage can be difficult if the car isn't in your name—even if you drive the car every day. That's because insurers typically won't let you insure a car that isn't registered to you. Fortunately, you may have options to get the protection you need, including non-owner insurance. Here's what you need to know about getting coverage for a car that isn't in your name.
Can You Insure a Car You Don't Own?
You generally can't insure a car that's not registered in your name, primarily due to something called "insurable interest." When you apply for car insurance, the insurer wants to see that you have a financial stake—or an insurable interest—in the vehicle. Insurers assume you'll drive more carefully and take better care of the vehicle if it is yours.
There's another reason insurance companies only issue coverage to registered car owners: Insurers pay out accident claims to the policyholder for the damaged vehicle. If the company insures you for a vehicle you don't own, you could potentially receive money for damage to a vehicle that isn't your property. This has the potential to lead to insurance fraud, since scammers could take out a policy just to file a false claim and collect the insurance payout.
Still, car insurance companies make an exception to this rule for married couples. For example, if you're newly married and you and your spouse each own a car, it's common to combine your insurance into one policy. In fact, many insurers require you to have your spouse on your insurance if you live in the same household.
Most insurers won't cover a car you don't own, but you might still get coverage with a non-owner car insurance policy. This policy provides basic liability coverage that protects the policyholder when driving a car they don't own. It does not extend to others, like a relative who lives with them. However, non-owner car insurance isn't available in all states, so check with an auto insurer or your state's insurance commissioner to find out if it's sold where you live.
How to Insure a Car You Don't Own
If you need insurance on a car that isn't in your name, you may have a few options for coverage, including the following:
Get Added to the Owner's Policy
Having a registered car owner add you to their insurance policy may be the easiest way to get coverage for a car you don't own. This is common practice and is often required if you live with the car's owner, such as a spouse or partner, parent or child. However, it might be hard to qualify for coverage if you don't live at the same address as the car's owner.
Transfer the Car Title to Your Name
Another coverage option is to add your name to the title and registration or transfer them into your name. With your name on the title, you can take out your own insurance policy for the car, whether you live with the other owner on the title or not.
Demonstrate an Insurable Interest
You may be able to secure coverage if you can demonstrate that you have an insurable interest in a car, even if you don't own it. For example, the car might be the only way you can get to and from work.
If you choose this route, it's imperative to be open and truthful when explaining your situation. Providing false information is illegal and could lead to your policy being canceled. Even worse, if your insurer denies a claim because of misinformation, you could be stuck paying for any damages out of pocket.
Get a Non-Owner Car Insurance Policy
If you need coverage for a car you drive regularly but isn't in your name, a non-owner car insurance policy might make sense. It could also be a good option if you're between cars or frequently rent cars. This insurance covers injuries and damage you cause to others, but it won't pay for repairs to the car you're driving or cover your own medical bills after an accident.
Buying a non-owner policy could be tricky as not all insurance providers offer it, but some major providers do. Contact your insurer or get quotes from other major insurers online or speak with an agent by phone or in person.
Check Your Policy for Rental Coverage
Before paying extra for rental car insurance, take a minute to see if your existing auto policy covers you. Many standard policies provide liability protection when you rent a vehicle, and some even offer collision coverage. A quick call to your insurer or a review of your policy contract can clarify exactly what's included in your coverage.
Remember, rental car companies require liability coverage if you don't have your own auto insurance. In that case, a non-owner car insurance policy may be more affordable than paying for liability coverage from the rental company every time you rent.
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How Does Non-Owner Car Insurance Work?
Non-owner car insurance can provide you with liability coverage when you drive a car you don't own. If you're in an accident, the car owner's insurance pays first as the primary coverage, and your non-owner policy steps in as secondary coverage for any remaining costs. Some policies cover uninsured and underinsured motorists and medical payments for you and your passengers, so research policies thoroughly before choosing a provider.
Keep in mind, though, since non-owner insurance isn't tied to a specific vehicle, it only covers liability costs including bodily injury and property damage for the other party or vehicle. It doesn't cover physical damage to the car you're driving or any of the following coverages:
- Comprehensive
- Collision
- Towing
- Rental reimbursement coverage
In a standard auto policy, comprehensive insurance covers non-crash-related damage, such as fires, vandalism, hailstorms and fallen objects. Collision insurance pays for repairs to your vehicle if you hit another vehicle or object. Since these coverages aren't included in a non-owner policy, you'll have to use the car owner's insurance for repairs or cover the cost of damages yourself.
Frequently Asked Questions
The Bottom Line
Getting insurance coverage on a car you don't own can be difficult, but there are ways to make sure you're covered. Whether you're getting added to the car owner's policy, purchasing a non-owner policy or transferring the title, your coverage options will likely depend on the insurer's requirements and your specific situation.
It's also a wise practice to review your policy regularly to make sure your coverage still meets your needs. And since premiums vary by insurer, you may want to shop and compare carriers to find the best price for the coverage you need. Experian's free quote comparison tool can help you do just that by comparing policies among multiple insurers.
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About the author
Tim Maxwell
Tim Maxwell is a former television news journalist turned personal finance writer and credit card expert with over two decades of media experience. His work has been published in Bankrate, Fox Business, Washington Post, USA Today, The Balance, MarketWatch and others. He is also the founder of the personal finance website Incomist.
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