Last updated: August 2022
Typically, people insure the car that they own, but sometimes, there are circumstances that leave you wondering, “Can I insure a car I don't own?” Perhaps you're borrowing a car from an elderly relative who no longer drives while you save up for a new vehicle. Maybe you live abroad, but you're borrowing a friend's car while you're back in the country visiting friends and family. No matter what your reason is, if you're driving a car, you need insurance to meet your state's minimum requirements.
Keep reading below, and we'll explain whether you can insure a car you don't own, if a car owner can add you their policy, and what other options you have.
Can I Insure a Car I Don't Own?
First, let's address the main question here. Can you insure a car that you don't own? Well, it depends.
In some areas of the country, it's essentially impossible to get a vehicle insured if you don't own it. For example, New York doesn't allow you to have different names on your registration and insurance policy. When you take out an auto insurance policy, it must match the name of the person who registered the vehicle. If you live somewhere with a similar law, your best bet is to contact your state's Department of Motor Vehicles to discuss your options, according to ValuePenguin.
Your state doesn't have a rule outright preventing you from insuring a car you don't own? Well, you'll still have to prove to an insurance company that you have insurable interest for the vehicle in question, according to ValuePenguin.
What Is Insurable Interest?
Investopedia says “a person or entity has an insurable interest in an item, event or action when the damage or loss of the object would cause a financial loss or other hardships."
Why is Insurable Interest Important?
Before an insurance company will provide you with coverage, they want to see that you have insurable interest for the item in question. If you have no real financial stake or serious reason to keep the object in good condition, an insurance company is unlikely to cover you.
How Does Insurable Interest Relate to Insuring a Car I don't Own?
When you own a vehicle, insurable interest is fairly obvious. You've spent your hard-earned dollars to buy the car, truck, or SUV you're driving around. If you were to be involved in an accident, you'd be extremely inconvenienced and potentially out a lot of money. If you crash while driving a vehicle you don't own and didn't pay for, you're not the one who loses out on a big monetary investment, and insurance companies know that. For this reason, insurance companies will want you to prove that you have insurable interest for any vehicle you do not own before they agree to cover you.
So, What Are My Options?
Now that we've walked through insurable interest, you're probably wondering what are all the options you have to get insurance on a car you don't own. Let's break them each down.
Prove You've Got an Insurable Interest in the Vehicle
How exactly do you display you have some sort of interest in a vehicle you don't own? ValuePenguin says the trick rests in proving you have a legitimate need for this one vehicle in particular. For example, if you need the car to get to work and don't have any other alternatives, you'll be working hard to keep it in great condition. Be honest with your insurance agent, and it might work out in your favor.
However, you should note that proving insurable interest can be difficult, so you might want to have a backup plan ready, or try one of the other options instead. Also, you should note that switching insurance over on a car like this could cause the current owner to have a lapse on their record, which will probably hurt their rates in the future.
Get Added as a Driver on the Owner's Policy
In certain cases, someone borrowing your car might be covered under your policy. To make sure, a vehicle's owner could try adding you as a driver on their policy. This is a common occurrence with kids who are just beginning to drive when they're listed on their parents' policies. ValuePenguin does note that this is less common when you live in a different location from the owner, with students away at school serving as an exception. However, if it's possible to be added to their existing policy, this is an option worth serious consideration.
Transfer of Ownership
As we've discussed, the main way insurance companies determine insurable interest is by looking to see if your name is on the car's title. If you're inheriting a car from a close friend or family member, they may be willing to transfer ownership to you outright. If you become the owner of the car, getting an insurance policy should become much easier.
Getting Added to the Title
If the person who owns the car isn't comfortable transferring ownership completely over to you, they might consider a co-title. Essentially, the owner of a vehicle can add an additional owner, you, to the car's title. According to Autoblog, this can be complicated, though, because every state has its own rules, and you'll have to see what's possible where you live. Also, if there's still a loan on the vehicle, trying to add another owner could be problematic.
Look into Non-Owner Car Insurance
Whether you rent cars frequently or are in-between vehicles, non-owner car insurance could be an option for you. A typical non-owner policy provides liability coverage (bodily injury liability and property damage liability) for drivers who don't own a vehicle. Depending on the policy and where you live, it might also include medical payments coverage and uninsured motorist coverage. Non-owner coverage doesn't provide comprehensive, collision, rental reimbursement, or towing, so make sure to talk to an agent to determine if non-owner car insurance is right for you.