Updated September 21, 2020: Most of us get auto insurance thinking, “I own this car, so I need to insure it.” Unfortunately, insurance scenarios aren’t always so cut and dry. For instance, you can get auto insurance if you don’t own a car; you simply take out a special non-owners insurance policy. But what if you wanted to insure a specific car you didn’t own? Would an insurance company cover the car?
In some circumstances, yes, you can insure a vehicle you don’t own, but it’s difficult to become the primary policyholder on a car that’s not yours. And it’s extra tricky to get coverage if you don’t live with the vehicle’s owner. (We can help you easily compare car insurance quotes.)
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Insuring a car you don’t own
When you apply for a policy, auto insurance companies look to see if you have what’s known as “insurable interest” in the vehicle. If you own the car, that interest is clear. (We've got a list of the best car insurance companies here.)
If you don’t own the car, things get murky. Without insurable interest, insurers worry you might not make the effort to keep the car from being damaged, since it's not yours anyway.
There’s another reason why trying to insure a car you don’t own kicks insurers’ spidey-sense into overdrive: Sometimes, it’s a sign of insurance fraud. Generally, you have to have some ownership in the auto to insure it. Otherwise, anyone could buy insurance on another person's car and get paid off when it gets damaged.
How can I insure a vehicle car I don’t own?
Of course, there are plenty of legit reasons why someone needs to insure a car they don’t own. A common scenario involves parents gifting an old car to their kid, or a grandparent granting primary use of their vehicle to their grandchild once they stop driving regularly. Sometimes, there’s a quick fix for families. If you still live with your parents, for instance, they can usually add you as a driver on their policy. Separate addresses, as we intimated earlier, make matters more complicated, but there are ways to get it done. Here some strategies to insure a car you don’t own. (Here are some other questions about car insurance you may be too embarressed to ask.)
1. Get the car co-titled.
You don’t necessarily need to own the car to get it insured. You can often simply add your name to the title. Co-titling can be difficult if there's a loan on the vehicle, but if it's paid off, it's a way to give yourself insurable interest in a vehicle.
2. Demonstrate need.
Outside of co-titling, you can sometimes convince the insurer to cover the car if it’s your only mode of transportation and you plan to drive it regularly. Say you need the car to commute to a job, you can’t afford one of your own, and there’s no public transportation nearby. Carriers may insure the vehicle for you if you have regular custody of it. This often comes up with college students who drive their parents' cars while they're living at school.
3. Check each carrier’s rules.
Some insurance companies decline coverage even if you do live with the vehicle’s owner. Some don’t.
An insurance company might grant you insurance if you don’t have ownership of the car or live with the primary title holder or have any insurable interest in the car. In other words, it helps to shop around and ask a lot of questions. Every carrier is different, and underwriting can vary from state to state, even among the same insurance company. Here's a guide.
4. Be open and honest with insurers.
You don’t need to give an insurance company a huge sob story, but it helps to be honest about your situation. Give them all the details they need pertaining to your driving record, financial history, and where, when and how often you plan to drive the car. If applicable, tell them you need an insurance policy to drive the car while you’re saving up to buy it. Hiding information, conversely, could turn off an insurance company that otherwise would have given you a chance.
5. Explore other insurance options.
Remember, you can always take out a non-owner’s car insurance policy until you can buy the car from its owner, add your name to the title or find a carrier who will insure the vehicle, non-ownership status aside. Non-owner’s insurance is limited. It’ll only offer you liability coverage (no comprehensive, collision, etc.) as it’s intended to insure you when borrowing a car or driving infrequently. Still, it gives you some insurance and access to the car for the time being.
Getting ready to buy a car? Learn how to read a car insurance quote first.
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Image: Josh Rinard