Can I Get Insurance on Someone Else’s Car?
You may want to purchase auto insurance for someone else’s car for a few reasons. Maybe you just got your driver’s license and want to drive around in mom or dad’s old car; maybe you want to drive your rommate's car; or maybe you have a good friend who is going to be away for a few months and wants you to be able to drive his car while he's gone.
Unfortunately, you usually can’t get a car insurance policy issued in your name to cover a specific vehicle that is registered and titled in someone else’s name. But, if the car is already insured, you can usually be added to the policy. In some instances — like driving your parents' car — you may already be included on the policy.
Read on for more details.
Getting Insured for Driving Your Parents’ Car
Drivers who live with their parents can usually get insured pretty easily by having their parents list them as a driver on their existing policy.
According to Karl Newman, president of NW Insurance Council, “The insurance contract that you and your insurance company both sign requires you to tell the company about household members of driving age.”
So if your parents' car is already insured and you live in the same house as the them, chances are that you're already included in the policy. You should still check the policy and with your agent, though, to make sure that you're covered and that there are no exclusions that would nullify your parents' policy while you're behind the wheel.
While it may be easy to get listed on a parent’s policy, it may not necessarily be cheap. More times than not, parents who add children to policies will see their premiums increase quite a bit. If your parents are low-risk drivers who are insured with a company that specializes in these types of “preferred” customers, your elevated risks may cause their rates to soar.
If you absolutely must drive your parents’ car but are causing their rates to skyrocket, see if they want to shop around. By shopping around, you and your parents may be able to find a company that’s more willing to accept your and your parents’ risk levels at a cheaper rate.
Before convincing your parents to switch companies, be sure that it’s the best option. Mom and dad could lose out on discounts for not sticking with their current company such as a loyalty discount or a multi-line discount if they have their cars and home insured together.
Making Sure You’re Insured in Your Roommate’s Car
If you have a roommate and intend on driving his or her car, you’re going to want to make sure accidents will be covered. Insurers’ requirements for policyholders to disclose household members of driving age also applies here and is not just for the policyholders’ children.
However, living with and disclosing roommates old enough to drive will probably mean paying a premium to cover the risk of them driving the insured cars and getting into an accident.
In this case, Newman states that, “The vehicle owner would be billed the full premium and, if there is an additional premium, it would be the responsibility/option of the vehicle owner to ask the roommate for reimbursement.”
Policyholders could also exclude roommates from policies to avoid increased premiums, but if the roommates drive the insured cars, any losses won’t be covered under the owners’ policies.
Being Insured in a Nonhousehold Member’s Car
Typically, when you are permitted to drive someone else’s vehicle you are covered by the owner’s existing policy.
According to Newman, “Insurance follows the vehicle in most states ... so a friend borrowing a car is covered by the owner's policy up to the limits purchased by the owner, as long as that friend has the owner's permission to drive the vehicle.”
So, if you’re given permission to borrow your friend’s or parents' car, you should be covered up to their policy limits.
How frequently you borrow the car may determine whether you are covered, though. If you borrow the car once a month for a day or so, it usually won't be a problem. But if you use it more frequently than that, you may need to be added to the policy in order to be covered. This will vary from company to company and policy to policy.
Another important thing to consider is that if you are responsible for an accident, you could be held liable for the damages you cause.
For example, if you borrow your friend’s car and he or she insured it with $10,000 in property damage liability coverage, that’s the max you’ll be covered with. If you hit a vehicle valued at $20,000 and it’s damaged beyond repair, you could be on the hook for the remaining money due to the owner of the vehicle you hit. In this case, it would be $10,000.
To insure against this you could purchase a personal liability (umbrella) policy.