Most auto insurance policies cover a vehicle owned by the holder of the policy. There are times, however, where you may take custody of a car that is not registered to you, but of course, still need insurance for. Getting insurance for a car you do not own may prove to be difficult. We go over the instances where it may be possible, as well as alternatives to explore.
Can You Get Insurance For a Car Not Registered to You?
You can get car insurance for a car you do not own in certain cases, though many states and auto insurance company are not willing to do so. The main issue comes down to ‘insurable interest’ in the vehicle. When you get insurance for a car that you own, there is an assumption you have a stake in the well being of the car. Most car owners wouldn’t want to crash their car because of the repair costs and the risk of loss on an investment. When you are not the owner of the car, that assumption cannot be automatically made. After all, if you crash a car you didn’t buy, you don’t stand to lose any money. Before you attempt to prove your insurable interest though, you should realize there are some situations where this is impossible.
State Laws May Prevent You from Insuring a Car You Do Not Own
In certain states, registration and car insurance go hand in hand. States like New York require you to have insurance in order to register a vehicle in the state. If the car you are supposed to inherit is registered in someone else’s name, that means there should already an auto insurance policy on that car--in the owner’s name. New York explicitly states that the name on the insurance card has to match the name on the registration. Failure to match can lead to a suspension of the registration, meaning you cannot insure a car you do not own in the state of New York. This information may not be explicitly detailed on your own state’s DMV page. You may have to call either your state DMV or your insurance company to see whether it is legal to have an insurance policy that differs in name from a car’s registration name.
Even If It Is Legal, It Can Be a Burden on The Owner of The Car
The owner of the car will likely have to take on a lapse in auto insurance coverage if they need to cancel their insurance and pass on the vehicle to you. In California for example, the name on the registration and the insurance do not have to match. Yet, since every state (including California) requires you to have car insurance before you can register a car, that means there should already be a car insurance policy on that vehicle. Whoever has the policy on the car at that moment would have to cancel their policy thus incurring a lapse--which as we found, can be expensive. Unless you live with that person as well, you wouldn't be allowed to join their policy either.
How to Get Insurance For a Car You Don't Own
If you have no other option but to get auto insurance for a car you do not own (and none of the alternatives below apply), you will need to shop around at insurance companies and talk to several agents before one may be willing to insure you--if your state allows it. The trick will be to persuade them of your financial stake in the car. If you can convince your insurance company that the car is your sole way of getting to work for example, that may work in your favor for securing auto insurance.
The worst thing you can do however is to lie to your car insurance company. Lying to your insurer is not only illegal, but would void your policy and make you uninsurable in the future. Insurance companies work to minimize risk so anyone who lies to them is considered a large risk to insure. If they figure out you lied after getting into an accident, you may be on the hook for all the damages that resulted from the collision. Remember to be honest with your insurance company about your circumstances.
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Alternatives to Insuring a Car You Do Not Own
Depending on your circumstances, there may be some viable options to consider before going through the hassle of trying to get auto insurance for a car you do not own. The easiest alternative would be to see if you can be added to the registration of the vehicle, or have the registration transfered over to you. In most cases two or more names can be on the title to a car. Once you have your name on the title, you can take out an insurance policy on the vehicle--even if you live at a separate address as the other title holder. The next best option would be to get a non owner car insurance policy.
Adding Yourself to or Transferring the Registration of The Vehicle
This option may not be ideal for every situation, but if it is possible, it will be the most convenient. You can share the registration of the car even if you do not live together. Being added onto a car registration can be simple or a hassle depending on which state you are from. In Indiana for example, you have to apply for a whole new title. You will have to search your own state's DMV and follow their rules for adding another name to a car registration. If the car in question is leased, you will need to talk to your leasing company. They may not want you to share the title of the vehicle with someone else.
If you want the title of the car to be completely transfered, you should see if your state allows the original owner to 'gift' the vehicle. If the vehicle is gifted, you usually will not have to pay a sales tax on the vehicle. Whether it is a gift or not, you should go to your state's DMV page and follow all the instructions necessary for transferring a car title.
The Car Owner Adds You to Their Insurance Policy
If the car owner's insurer allows it, have the original owner of the car add you to their insurance policy as a listed driver. This is especially easy if you and the owner live in the same house. If you don't live with the owner, your insurer may likely be less agreeable - you'll have to convince them of your vested interest in the car, as we mentioned above. Students living away on campus for school are exempt; they can be insured even if they don't reside at the main address on the policy.
Non Owner Car Insurance
Non owner car insurance may not be the answer for everyone either, but if you rent cars rather than have a car in your custody, a non owner plan can be what you are looking for. A non owner policy will provide you with the proper amount of liability insurance to be able to drive around comfortably. This policy would be great for nannies who may drive around many children in a family vehicle. While the family's car insurance policy would cover you in an accident, it may not be enough to cover you and the children. The family's auto insurance company would likely not add you to the policy either, so a non owner plan would be a good way to stay covered in that situation. We discuss non owner car insurance in more depth here.