If you're taking part in a rideshare program such as Zipcar, attempting to avoid a lapse in coverage or for another reason, you may find yourself looking for auto insurance coverage for a car not registered to you.
There are multiple ways to do this, such as getting added to the car's title or the owner's insurance, but each of these options comes with challenges and limitations that may make such coverage difficult to get.
Can I insure a car that I don't own?
Whether or not you can get car insurance for a vehicle that doesn't belong to you often comes down to who your provider is and where you live.
Several states don't allow people to buy insurance for a car they don't own, nor do many insurers. Many auto insurance companies are concerned that someone who doesn't have a vested interest in a vehicle won't be safe enough with it. This is a risk they'd just as soon avoid.
Another concern that car insurers have is fraud. If people were able to add cars they don't own to their insurance policy, they could purposely cause an accident and potentially get a high payout for a low cost. Insurers wish to avoid this scenario.
Some states have laws that make insuring a car for which you don't have the title impossible. In Washington State, for example, you need to have car insurance in order to register a car. Registration requires your name on the title.
States like New York make it difficult by requiring the name on the registration and the name on the car's insurance policy to match. Not having the names match can result in a license suspension. Check with your state's DMV to find out what your area's laws are.
How to insure a car you don't own
If you need to get coverage for a car you don't have the title to, you still have some options. Whether or not they're right for you may depend on different factors, so consider them carefully.
Get added to the car's registration
Of all the ways to insure a car not registered to you, the simplest means is usually to get added to the car's title. How simple the process is often depends on the state in which the car is registered. It may be as easy as getting added on your DMV's website, or it may require a whole new title to be drawn up.
If the car is leased, getting onto its registration may not be possible. Lessors usually do not like to have drivers added to the title of a car still being paid off. If the car is out of the lease and paid off, this shouldn't be an issue.
Get added to another driver's car insurance
Some auto insurance companies allow customers to add other drivers to a policy. Usually, the main criteria is whether or not you live at the same address as the policyholder. If you cohabitate with the policyholder, getting on the policy isn't usually difficult unless your own auto insurance history is poor. Once you're listed as a driver on the car insurance policy, you'll be able to pay the premium and file claims on it.
If you don't live with the policyholder, you'll probably be required to prove "insurable interest". This means you have a vested interest in the vehicle, such as if you'd be driving it frequently for errands.
There can be exceptions to this. Getting added to another driver's car insurance is quite common for college students who go to school away from home. Many insurers allow them to stay on a parent's auto insurance, even though they're not living at the same address.
Get non-owner auto insurance
Non-owner car insurance tends to be a good — but limited — option if you need insurance for a car you don't own. Non-owner insurance works like standard liability car insurance and covers property damage and injuries to others after a car accident. It's usually purchased by:
- People who frequently rent cars.
- Drivers looking to avoid a lapse in coverage.
- Drivers in need of an SR-22 or FR-44.
The main disadvantage to non-owner car insurance is that it only covers liability to others. If the car you're driving is damaged or you're injured, non-owner insurance will not cover those costs. For this reason, it's preferable that you get on someone else's full-coverage policy. That way, your damages and medical costs would be covered after a crash.
Who gets car insurance for vehicles they don't own?
The need to get car insurance for a vehicle the driver doesn't own is not uncommon. People looking for it include:
- Car-sharing service drivers: Most car-sharing services, such as Zipcar, usually do not offer enough liability insurance coverage for all the damage that can result from an accident. Having non-owner insurance can help supplement the offered auto insurance — and reduce your out-of-pocket expenses.
- Drivers who want to avoid a lapse in coverage: Having even a short lapse in auto insurance coverage can lead to higher rates. Getting your own car insurance can help keep your rates down.
- Frequent borrowers of a car: If you use a friend's or family member's car frequently, having your own insurance can cut down damage costs for both of you in the event of an accident.
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