Can you insure a car that is not in your name?

Can you insure a car that is not in your name? Are there any restrictions in your state or with your auto insurance company? Also, how will adding a vehicle to your policy that you don’t own affect your auto insurance rates?

In most cases, your auto insurance company will not allow you to add a car to your policy that you do not own. Also, there are restrictions in some states. However, in some situations, it is legal to insure a car in your name.

Read on to learn about the situations in which you can legally insure a car that is not in your name and why your auto insurance company might allow it. And if you would like to view rates from top auto insurance companies in your area right now, you can enter your ZIP code into our free quote tool above.

Do auto insurance companies allow you to insure a car that is not in your name?

For example, you may wonder, Will State Farm insure a car that is not in my name? or Will Geico insure a car that is not in my name? In most cases, the answer is no. Why is that?

Auto insurance companies often prevent non-owners from insuring vehicles. These companies need policyholders to prove insurable interest. That means you have a financial stake in the car that you list on your policy. For example, holding the car’s title establishes insurable interest.

To reduce fraud, auto insurance companies want to make sure that the individuals listed on policies own the vehicles that they insure. This way, insurance companies can ensure that they pay claims to the appropriate person for the right reason.

Otherwise, it helps if all people listed on a policy live close to one another because you can commit insurance fraud by misrepresenting your residential information on a policy.

The National Association of Insurance Commissioners emphasizes that this is one kind of soft insurance fraud. Someone commits soft insurance fraud when they misrepresent their information (like their address) in an attempt to lower their auto insurance rates.

The NAIC also cites 2017 data from Verisk disclosing that auto insurance fraud has cost the companies at least $29 billion. The bottom line is that auto insurance companies take fraud seriously, and anyone who commits it faces steep penalties and other legal consequences.

Even if you are honest about your address, insurable interest might be hard to prove when someone else owns a car that you would like to add to your policy. However, there are some situations where your auto insurance company will allow you to add another person’s vehicle.

When can you usually add another person’s car to your auto insurance policy?

Here are a few ways to cover a car that you don’t own.

First, add another driver and their car to your policy. That may be the simplest way to add a car that is not in your name. And that is especially true if you and the other driver live in the same household, you are related, and you reside in the same state.

If your auto insurance company accepts the additional driver, it’s because that person has an insurable interest. That person likely presents a low risk as well.

Another way you can insure a car that is not your own is to rent a vehicle and cover it, and there are a few ways you can do that:

• You can purchase a temporary policy through a rental company to insure that vehicle.
• Your primary auto insurance policy pays for temporary rentals if your car is damaged during a covered incident.
• You can rent a car while on vacation if your regular car insurance company covers it.
• You may otherwise obtain temporary coverage for rentals through your credit card company.

When your auto insurance company covers rental cars, you typically need full coverage auto insurance. That’s a benefit of adding comprehensive and collision auto insurance coverage.

Yet another situation in which you can insure a car that is not yours with your primary auto insurance policy is if you have a business auto policy. However, your employer pays to insure a company car.

What else can you do in terms of auto insurance when you drive cars that you don’t own?

If you need auto insurance for a car that is not in your name, here are a few things that you can do:

• Purchase a non-owner auto insurance policy – That is perfect if you often borrow or rent cars and do not frequently use the same car.
• Ensure that you have permissive use – Many auto insurance companies will provide coverage if policyholders allow people they know to borrow their vehicles.
• Ask a policyholder to add you to their policy – Seek this option if you often borrow another person’s car. However, this is easier to do if you and the other person live in the same household.
• Get added as an additional interest – If you have a financial interest in the car but will not use it as a primary driver, that person’s auto insurance company may approve this move.

Beyond these options, you may share a car title (co-title) in some states. Alternatively, have the original vehicle owner transfer the title to you if they gift you a car. However, you will need to insure the vehicle yourself.

Is insuring a car that you don’t own legal in your state?

For example, can you insure a car that is not in your name in Georgia? What about in states like Texas and California?

New York is the only state that has a law requiring a driver’s name to be listed on both the car registration and the auto insurance policy. On the other hand, California and Florida do not uphold this requirement.

Other states might not follow New York’s laws, but they restrict who can insure a car. Above, we mentioned that auto insurance companies need to establish insurable interest. For the same reason, some states make it difficult to insure a car that you do not own.

Exceptions might include situations where a person or institution holds a lien on a car or finances it. If you are leasing your car, either the bank or the other lending institution that backed the lease has a financial interest in your vehicle.

Check with your state’s insurance department or commissioner to determine what your state allows.

What’s the final word on insuring a car that’s not in your name?

As you can see, there are a few ways to insure a car that is not in your name. However, you can also do the following:

• Prove an insurable interest.
• Be aware of what your auto insurance company will allow.
• Be honest with your information and anyone else’s details if you want to add them to your policy.
• Keep abreast of your state’s auto insurance laws.

Auto insurance companies are flexible if you are honest, follow state laws, and present as little risk as possible. Also, ensure that you carry the correct types of auto insurance, so that you have coverage if you need to use a car that someone else owns.

Now that you know more about insuring a car that is not in your name, would you like to see rates from top auto insurance companies in your area? Simply enter your ZIP code into our free quote tool below to get started.