Generally, car insurance covers the vehicle owned by the policyholder. Sometimes, however, you can buy a policy for a car you don’t own.
A few instances where you can buy car insurance without being a registered owner include:
- You regularly use one of your family members’ or friend’s car
- You take care of the car on behalf of the owner, who either doesn’t drive or just drives occasionally.
- You are still paying off the car’s purchase value and don’t have its title
How to Insure a Non-Owned Car?
Depending on your circumstances (mentioned above), you can choose one of the following options to insure a non-owned car:
- Include Your Name on the Vehicle Owner’s Policy
If you live with the car owner, you can include yourself as a driver on their policy rather than buying a separate insurance policy. If you don’t live with the car owner and use their car occasionally, you can add yourself as a “permissive use” driver.
In case you are a caretaker and the car owner is an employer, not a family member, you can be listed as a primary driver to their policy. Likewise, if your employer doesn’t have a valid driver’s license or doesn’t drive, they can be listed as the owner in the policy rather than a driver, and you can be added to their coverage.
- Add Yourself to the Vehicle Title or Registration
Adding your name to the title or registration gives you “insurable interest,” meaning you have the right to buy insurance to save the vehicle from damage/loss.
If you are the car’s co-owner, you can be listed as the “additional insured” to the policy. Additionally, if you drive your parents’ car but reside elsewhere, you should have your name added to the title or registration to purchase a separate insurance policy.
If you buy a car from a private seller with an installment plan, they may keep the title until the full amount is paid. Nevertheless, you can ask them whether they can transfer the title to you to help you buy a car insurance policy. In these cases, the seller can be listed as a lienholder on the title.
- Add the Car Owner as an Additional Interest to Your Policy
You can buy car insurance in your name by adding the car owner as an additional interest (meaning they have a stake in the vehicle and should be notified about policy changes) to your policy. Though it keeps the vehicle owner involved, only some insurance companies offer policies this way, so check with your provider for more clarity.
- Buy Non-Owner Car Insurance
A non-owner policy provides supplemental coverage (secondary to what’s owned by the owner) when you drive borrowed/rented vehicles. For example, if the car owner’s coverage limits are inadequate to satisfy a liability suit, it offers compensation for at-fault incidents.
Because no car is named on the insurance, collision and comprehensive coverage will be unavailable. You cannot buy the policy if you frequently use a non-owned car.
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