It seems obvious, but when you’re in the market for auto insurance, you’re usually seeking insurance for your own car. But what if you want to insure a car that you frequently use, but don’t own?

Getting car insurance for a car you don’t own is possible. However, the rules about it vary state by state and are largely up to your auto insurance company.

Does Your Car Insurance and Registration Have to Be Under the Same Name?

The short answer is: usually, but not always. It depends on your state’s laws. For instance, New York requires the names to match, whereas California does not.

Even if you can legally insure a car you don’t own in your state, you will have to find an auto insurance company to agree to it. Many companies are reluctant, due to fear of fraudulent claims.

Why Would You Want to Insure A Car That Isn’t Registered to You?

Why would you even want to insure a car not in your name? Here are a few reasons:

  • You borrow your family member's car on a weekly basis.

  • You’re a nanny who drives your employer’s car daily to pick up their kids from school.

  • You’re a college student who attends school out of state, and you use a car that your parents gave you.

Without your own car insurance, you will have to be added as a driver on the owner’s policy. In turn, you will have to abide by their insurance’s restrictions for added drivers, which can include:

  • Limitations on how far you can drive.

  • Rules that you can’t drive the car out of state.

  • A requirement of written permission from the owner.

If these rules are too restrictive, you may want to get your own car insurance. So how do you go about doing this?

How Can You Insure a Vehicle That You Aren’t The Owner Of?

To have any shot of insuring a car you don’t own, you must display “insurable interest.” Insurable interest is proof that you have a legitimate, financial stake in insuring the car.

People who have an undeniable insurable interest are:

  • The vehicle’s owner

  • The vehicle’s lienholder

  • The vehicle’s loan co-signatory

How to Prove Insurable Interest?

If you don’t fall into these three categories, you will have to display why this vehicle matters to you from a financial perspective.

For example, maybe you use the car to commute to work. It’s your only option for affordable transportation. Without it, you face the financial hardship of missing work or having to pay for expensive Ubers.

Even if you make a solid case like this, it’s still up to your auto insurance company’s discretion to grant you coverage.

Why Do Auto Insurance Companies Care About Insurable Interest?

Without insurable interest, auto insurance companies are concerned about fraud. If you have no monetary investment in a car, you might drive it around recklessly to file insurance claims for financial gain.

Or maybe the car’s real owner has a terrible driving record and faces exorbitant insurance premiums. They ask you to apply for insurance instead, so they can get a lower premium in a roundabout way.

Understandably, insurance companies want to protect themselves from these situations.

How To Insure A Car You Don’t Own

If you can’t prove insurable interest, there are still a few ways to get insurance coverage:

  • Get Added to the Car Owner’s Insurance Policy – Ask the vehicle owner if they can list you as a driver on their policy. If you’re using their car on an ongoing basis, they should do this for their own protection. This may come with some restrictions, but it’s better than nothing.

  • Become a Co-Owner of the Car – If the car’s owner is willing to share ownership with you, take them up on it. As a co-owner, you can purchase car insurance with ease. To become a co-owner, go to the DMV with the original owner and file for a new title.

  • Transfer the Registration to Your Name – You can also transfer the car’s registration to your name. This will make you the sole owner of the vehicle. This is only applicable if the original owner is willing to gift or sell you the car. To transfer the car’s title, consult with your local DMV for details.

  • Purchase Non-Owner Auto Insurance – You can also protect yourself with Non-Owner car insurance. This is made for drivers who borrow or rent cars frequently. Non-owner car insurance doesn’t include collision insurance, which would cover the costs of repairing the vehicle in case of an accident. Collision coverage remains the responsibility of the vehicle’s owner.

Get The Auto Insurance You Need Today

The process of insuring a car that you don’t own is tricky and oftentimes futile. The degree of hassle involved depends on your state laws and your auto insurance company’s policies. Plus, even if you find the right company, you might be left wondering why is car insurance so expensive? Fortunately, there are other (more affordable) ways to get the auto insurance protection you’re after.

To get a great deal on your auto insurance policy, compare rates with Online Auto insurance. Enter your zip code below and you’ll find competitive quotes, coverage comparisons, and tools to help you determine the right amount of coverage for your situation. If you’re just here to learn how to lower car insurance rates, then we can help with that too.

Sources:

New York State Department of Motor Vehicles. New York State Insurance Requirements https://dmv.ny.gov/insurance/insurance-requirements

Investopedia. Insurable Interest https://www.investopedia.com/terms/i/insurable-interest.asp