Can You Insure a Car You Don't Own: A Complete Guide
If you’re someone who normally makes the best of public transit or other means of getting around, but still need to drive now and then, you’ve likely looked into non-owner car insurance. This type of insurance offers coverage to drivers who don’t have their own vehicle but occasionally spend time behind the wheel.
While insuring a car you don’t own isn’t a walk in the park, never say never. With the right information and company, you can secure car insurance for a vehicle that isn’t in your name.
Non-Owner Insurance Coverage
Non-owner car insurance is liability coverage for drivers who don’t own their own vehicles but drive someone else’s car from time to time. This liability insurance generally only includes the required state minimum coverage, although you can choose to have higher limits.
Along with liability coverage, non-owner insurance typically includes these coverage types:
- Uninsured/Underinsured motorist protection: This coverage protects you if you’re injured in an accident caused by a driver who doesn’t have insurance or doesn’t have enough liability insurance.
- Personal injury protection: This form of coverage pays for your injuries after a collision no matter who’s at fault.
There is no deductible for non-owner insurance, but non-owner car insurance doesn’t include comprehensive or collision insurance. So if you’re in a crash and you’re at fault, you’ll need to figure out how you will pay for repairs to your vehicle.
Avoid Lying to Your Insurance Provider
Even if you struggle to prove your financial stake in the car to your insurance company, you want to avoid lying to them. Lying to your insurer is not only illegal but will void your policy and make it difficult for you to secure insurance in the future.
In addition, when they find out you lied about your circumstances, you’ll be held accountable for any costs related to a collision. Be honest with them about your situation and see if they are willing to work with you to get coverage on the vehicle.
The Cost of Insuring a Car You Don’t Own
The cost of non-owner insurance is generally cheaper than traditional car insurance for a vehicle you own. However, if you’re a driver that needs your insurer to file an SR-22 or FR-44, you can expect to pay more until you don’t need these documents anymore.
The final cost of car insurance depends on several factors such as your age, gender, address, driving history, and more. While there’s not much you can do about your age or gender, it’s best to shop around and compare rates to ensure you’re getting the best rates for non-owner car insurance.
When You Need Non-Owner Insurance
You might need to get non-owner insurance for several different reasons. Here are a few common situations you can find yourself in.
You Frequently Borrow Cars From Friends and Family
Do you find yourself borrowing cars from friends and family often? It’s true that the car owner’s insurance company will pay for the costs of a collision, but you’d be on the hook for any amounts exceeding their liability coverage.
For example, let’s say you’re driving your cousin’s car and are in an at-fault accident. The other driver needs medical treatment totaling $42,000. Unfortunately, your cousin only has $35,000 worth of bodily injury liability, which means you’ll need to pay the remaining $7,000 out of pocket. If you have non-owner insurance, this will cut the costs you’re responsible for.
You’re a Car-Sharing Service Driver
Many car-sharing services offer some level of coverage for drivers, but it’s not enough to cover more severe accidents. Legally, they only need to meet the state’s minimum requirements, and accident costs can easily exceed this amount. A non-owners policy helps you to supplement this coverage and protect your assets in case of a collision.
You Regularly Rent Cars
If you rent cars frequently enough, it might be a better financial choice for you to get non-owners insurance instead of using the liability coverage provided by the rental car company. Non-owners insurance won’t cover damage to the rental car, but there are other ways to secure that coverage. You can do so through a credit card or purchase a collision damage waiver from the rental company.
You Want to Avoid a Lapse in Car Insurance Coverage
Having a lapse in your car insurance coverage makes you a higher risk for insurers. A gap in your insurance history will also make it more difficult to find affordable insurance in the future.
If you’re planning to sell your car or won’t be driving for an extended period, this could be considered a lapse in coverage. Many drivers choose to purchase non-owners insurance to keep rates down and avoid a gap in their records.
You’re Following State Laws
In some states like Washington, drivers are required to have car insurance to register their car. Other states may ask drivers to have insurance before getting their license for the first time or restoring it after a suspension.
Reinstating Your Driving License
If you’re seeking to reinstate your driving license after a serious conviction, like a DUI, your state may require your insurer to first file an SR-22 or an FR-44. These forms prove you have the minimum coverage required by the state. Without them, you won’t be legally allowed to drive.
When You Don’t Need Non-Owner Insurance
Non-owner insurance isn’t for every driver who doesn’t have their own car. You can pass on non-owner insurance if you fit into the following scenarios.
You Rarely Drive
If you’re a driver who rents a car occasionally, or you only borrow a car from your friends once or twice a year, you might not need non-owner insurance. Instead, it’s more cost-effective for you to purchase the rental insurance offered to you at the counter or count on your friend’s insurance policy.
However, you must check that you’re covered before taking someone else’s car for a ride. Even if you have your friend’s permission to drive their car, their insurance company could refuse to cover you after a collision.
You Borrow Cars of People in Your Household
If you’re only borrowing vehicles from people living in your household, you don’t need non-owner insurance. You should be listed as a covered driver on their policy instead of getting a non-owner policy for yourself. Being listed as a driver is essential, as certain companies will deny coverage if drivers at the same address aren’t listed on the same policy.
You Drive a Company Car
If you drive a company car — a car owned by your employer— you might not need additional insurance. Since the vehicle is driven for business purposes, the company should cover you in case of a collision. However, if you tend to drive your company car for personal reasons, you’ll be liable for any accidents that happen during personal use. If this is the case, you may want to consider non-owners insurance to protect yourself.
Why it’s Difficult to Insure a Car You Don’t Own
Although it is possible to get coverage for a car you don’t own, there are a few obstacles you’ll need to overcome to have non-owner car insurance.
In some states, it’s impossible to insure a car you don’t own. In a state like New York, you can’t insure a car you don’t own because the name on your insurance card needs to match the name on the registration. If you fail to match the name exactly, they can suspend your registration.
Non-Owner Insurance Inconveniences the Car Owner
While non-owner insurance is possible in other states, it can greatly inconvenience the car owner. Drivers in California aren’t required to have the name on the insurance card match the name on the registration. However, since California requires you to have insurance on a car before registering it, there will already be an insurance policy on the car.
This means the driver is left with the option of canceling their car insurance for you to get a non-owners policy. Not only is this an expensive option, but it will make it difficult for the owner to get car insurance coverage in the future.
Insurable Interest Concerns
Another reason why it’s difficult to insure a car you don’t own is because of insurable interest concerns. Generally, auto insurance companies are weary about you insuring cars you don’t own. This is because car owners have a financial stake in their cars. If you sink thousands of dollars into a vehicle, you’re likely going to do everything in your power to avoid crashing it and paying expensive repair fees.
However, when you’re not the car owner, insurance companies can’t prove you have an insurable interest in the car.
Risk of Fraud
Insurance companies are hesitant to insure cars you don’t own because of insurance fraud. If drivers add vehicles to their policy that they don’t own, nothing is stopping them from crashing the car to get a high payout from their insurer. Insurance companies want to avoid this type of fraud, making it harder for trustworthy drivers to get non-owner car insurance.
Alternatives to Insuring a Car You Don’t Own
If you need to get coverage on a car you don’t own, you do have some options. Here are a few alternatives to insuring a vehicle you don’t own.
Add Yourself to the Registration of the Vehicle/Transfer Registration of the Vehicle
One of the most straightforward ways to insure a car you don’t own is to add yourself to the vehicle’s registration. Adding your name to the car’s title is one way to show insurance companies you have an insurable interest in the vehicle.
Depending on where you live, this can be a simple or more complex process. In some states, adding your name to the registration can be done on the state DMV website. In other places, you’ll need to make a trip to your local DMV office.
You could also transfer the title of the car to be in your name completely. If you choose to go this route, check if your state allows the owner to “gift” you the vehicle. Since the vehicle is a gift, you won’t be held accountable for the sales tax on the car. Whether or not the car is gifted, make sure to follow all instructions on your state DMV website for title transfers.
Keep in mind that you might be unable to add yourself to the title if the car is leased. Lessors aren’t big fans of having the title changed while the car is being paid off. Once your lease is paid off, it’ll be much easier to change the title.
State an Additional Interest
Additional interest on a car insurance policy refers to a person who has an interest that the vehicle is insured but is not the owner. You can display this by adding the owner of the vehicle you’ll be driving to your own insurance policy. This shows insurable interest on the vehicle owner’s part and makes it easier for you to get insurance on the car when you don’t own it.
Have the Car Owner Add You to Their Insurance Policy
Another option is to have the car owner add you to their insurance policy. This is the most common option for car owners and drivers who live at the same residence. If you choose to do this, remember that your address and the location where you spend most of your time driving have a significant impact on your monthly premium. In addition, getting added to the car owner’s policy will result in higher insurance rates.
If you’re a student away at college who’s living on campus, you won’t need to worry about a non-owners policy. Students can remain insured on a policy even if they don’t reside at the primary address on the policy.
Get a Non-Owners Policy
Non-owner car insurance is a good choice for drivers needing insurance on a vehicle they don’t own. While your coverage is limited, you will be protected to some extent if you get in a collision. It covers property damage and injuries to others after a collision. Drivers in these situations generally purchase it:
- Drivers who rent cars regularly
- Drivers who need an SR-22 or FR-44 form to secure insurance
- Drivers who want to avoid a lapse in coverage
Prove You Have a Need
This is a more complicated method of displaying insurable interest, but that doesn’t mean it’s impossible. It’s more complex than putting your name on the title, but demonstrating a need could help convince your insurance company to follow through. You can demonstrate need by proving you need access to the car to drive to work or that you can’t afford to purchase your own car.
Where to Buy Non Owner Car Insurance
To get a quote for non-owner car insurance, you’ll need to call or visit various insurance companies. It’s uncommon for auto insurance companies to provide non-owner insurance quotes online, and if they do, it’s only for existing customers.
The following companies offer non-owner car insurance:
Note: These insurance companies may not sell non-owner car insurance in every state. Call your insurance agent to check whether a non-owner insurance policy is available where you live.
Once you’ve purchased a non-owner insurance policy with a company, your insurer will send proof of insurance to you. If necessary, they can send you a digital copy immediately by email.
While it can be tricky to insure a car that isn’t yours, some situations call for it. If your current auto insurance company doesn’t offer non-owner insurance, shop around for one that will. Whether or not a company that provides non-owner insurance is a good fit depends on factors like your driving history and other personal information. Before making a purchase, do your homework and compare rates from multiple companies.
FAQs About How to Insure a Car That’s Not in Your Name
Can you insure a car that’s not in your name?
You can’t insure a car owned by someone else, but you can get non-owners insurance in order to have coverage while driving their vehicle. This will give you liability coverage to pay for damage you might cause to others, but it won’t cover any damage to the vehicle if you’re in an at-fault accident.
What insurers offer non-owner car insurance?
While insurance companies don’t broadcast to the public that they offer non-owner car insurance, you can buy this kind of insurance from different places. Some of these companies include Progressive, Liberty Mutual, Nationwide and Travelers. Companies that specifically market to high-risk drivers, such as Dairyland and Direct Auto, also offer non-owner car insurance.
Who should get non-owner car insurance?
Drivers who rent cars often, use car-sharing services, want to avoid a lapse in coverage, or frequently borrow cars from family and friends will benefit from non-owner car insurance.
Does non-owner car insurance cover my rental car?
The liability insurance from your non-owner car insurance policy will cover any damage done to others while you are driving your rental car. However, because non-owner insurance doesn’t include comprehensive or collision insurance, you’ll be responsible for any damage done to the rental car itself.