Most people who have auto insurance own the car they are insuring. But what if you often borrow a car from a friend or relative? Should you buy insurance for a car you don’t own? A non-owners policy may be a good idea when you are not the owner of the car, The main issue in this scenario comes down to how the insurance company views your insurable interest in the car. Let’s explain.
Insurable Interest
The basis for car insurance is an assumption by the insurance company that you have a financial stake in the vehicle you are insuring. This is a given if you own the car. But if you don’t own the car there is a chance you would not lose any money if you crash the car. Because every state has their own insurance laws and every insurance company has their own guidelines for coverage, you will have to be sure to do your research when your car insurance and registration are not under the same name.
Sometimes You Just Can’t Do It
In some states, laws may keep you from insuring a car you don’t own. For instance, in New York State it is required that the name on the registration and the name on the car insurance match. As stated, every state is different so be sure to check with the state Department of Motor Vehicles and also with your insurance company to find out whether it is legal in your state to have non-matching insurance and registration documents.
In states that do not explicitly prohibit this, you may need to do a little persuading regarding your financial interest in the vehicle. If you can show to your insurance company that you need the car to get to work, for example, they may agree to insure you.
Alternatives to Insuring a Car You Do Not Own
Adding an additional interest to your policy
One of the easiest ways to do this is to simply add the vehicle owner to your policy. This satisfies the insurance company’s insurable interest concerns and usually does not increase your premiums.
Adding yourself to the owner’s policy
Oppositely, you could add yourself to the vehicle owner’s policy. This is usually only an option if you share a residence with them as insurance companies tend not to cover drivers at different addresses. You may see an increase in premiums here also, depending on factors such as the driving records of all drivers covered by the policy.
Buying a non-owner insurance policy
Lastly, you could consider purchasing a non-owner’s auto insurance policy. This is a liability policy that is meant for people who do not have insurance themselves, but often drive another person’s car. A non-owners car insurance policy does not provide collision and comprehensive insurance. This type of policy usually goes hand-in-hand with the primary policy on the vehicle to increase liability coverage beyond the primary policy limits.
If you are considering a non-owners policy and your provider does not allow you to insure a car you don’t own, be sure to take the opportunity to shop around. InsuranceWins can help you get car insurance quotes with just a few simple steps. So why not get started right away?
