There are also several things to consider such as who can insure your car, the options for insuring a car you don’t own, the pros and cons of insuring someone else’s vehicle, and how to avoid insurance fraud.
Who can insure my car?
In some situations, it is advantageous to have someone else insure your car. Here are some scenarios:
Young driver
Teen drivers often pay high insurance premiums due to being perceived by insurers as high risk. Adding them to a family member’s policy can help reduce costs through multi-car discounts.
Non-primary driver
If you own a car you don’t drive often, you can list yourself as the secondary driver, while the regular driver is the primary one.
High-risk driver
With a poor driving record, you will pay a lot more for insurance. You may consider having someone else insure your car and include you on the policy to save on costs.
However, insurers may ask about the primary driver, revealing the high-risk driver’s record and consequently increasing insurance rates. There could be major repercussions for misrepresenting yourself when buying insurance.
Ways to insure a car you don’t own
Take out non-owner coverage
Non-owner car insurance will provide liability coverage for the person driving your car. The downside is that they won’t be able to take out full-coverage options like comprehensive insurance and collision insurance.
This means they will be covered if they cause damage to another person or their property, but there will be no coverage if they damage your car.
Some policies allow you to add protection for medical payments, personal injury protection, and uninsured/underinsured motorist coverage, and the minimum auto insurance requirements typically follow the state minimums.
Get your car co-titled
Adding someone’s name to the title is another way to insure a car by a non-owner. Once the car is co-titled, they should have an easier time taking out a policy.
In New York, for instance, a car can be registered with multiple owners. The state-required liability insurance and NY State Insurance ID card must display the registrant’s name, not the owner’s.
Co-titling might not be possible if the car is still financed, and each state has different rules.
Have “insurable interests” in your car
Someone else can insure your car if they can prove to the insurance company they have an insurable interest in your vehicle, even though their name isn’t on the title.
An insurable interest means you have a financial stake in the vehicle. For example, if you bought a car in full, you would have 100% ownership of the car, hence, you have full financial stake in it.
However, establishing their interest in the vehicle can be tricky when someone else is the owner as Insurance companies may be reluctant to provide coverage to someone other than the owner.
Someone else might not need to insure your car
In some situations, the other party is insured even if you take no action.
Some insurance policies have an allowance called “permissive use.” This means that as long as you give permission to someone to drive your car, and that person fulfils some criteria, such as how many times they can drive your car in a year, that person could be automatically insured.
Pros and cons of someone else insuring my car
Pros: The main advantage of having someone else insure your car is the potential cost savings. For example, if you are young, drive a family car occasionally, and get on your parent’s insurance policy, you could save some money as compared to buying your own car and insuring it on your own. As a young driver, this also helps you establish an insurance record.
Cons: Outside of a family situation, getting someone else to insure your car is often difficult. Whether someone else has insurable interests (i.e. a financial stake) in a car determines whether or not that person can insure it. It might be tempting to use false information to get a better quote, but misrepresenting information to get lower rates can lead to denied claims if discrepancies are discovered.
FAQ
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Can I put a financed car on someone else’s insurance?
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Can you insure a vehicle not in your name?
Xuyun Zeng is a content strategist with a wide-ranging content background including tech, journalism, cars and health care. After graduating with highest honors in journalism, Xuyun led a newspaper to win eight awards, helped start an award-winning film industry podcast and has written over a hundred articles about cars repair, state laws and insurance. Prior to joining Jerry, Xuyun worked as a freelance SEO consultant with a mission to create the best content that will help readers and grow organic traffic.
Giselle Gomez is an editor with over a decade of experience editing content across personal finance, education, travel, and sports. In editing for Jerry, Giselle’s focus is on making sure content is consumer and SEO-friendly and helping readers understand all things car ownership. In prior roles, she worked as a content strategist, syndication editor, and writer. Her work is featured in AP, NerdWallet.com, BestColleges.com, and more. Giselle holds a master’s degree from Arizona State University.
