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Compare nonowners car insurance policies
How to insure a car that's not registered to you.
It’s challenging to get insurance for a car you don’t own when your name isn’t on the title. Most insurance companies want to see you have insurable interest in the car, making it difficult to insure a car that’s not registered to you.
But you’re not at a complete loss if you’re looking to get insurance on a car you don’t own. You just have to find and compare the right insurers with nonowner car insurance.
What's in this guide?
When would I need nonowners insurance?
If you don’t own a car, but need insurance to drive one, opt for nonowner car insurance. Nonowner car insurance allows you to drive someone else’s car and be protected.
While driving someone else’s car
Whether you’re driving a friend’s car for an extended period of time and aren’t listed on their insurance, or you’re only borrowing it periodically — you might want a nonowner insurance policy. This way, if you get into an at-fault accident and exhaust the insurance on their policy, your nonowner policy helps cover what’s left.
You may be driving someone else’s car enough to get nonowner car insurance if:
- You take your parents’ car when you move for school.
- You live away from your parents but regularly borrow their car and park it at your home.
- You live with your parents and regularly drive their car, but aren’t listed on their policy.
- Your roommate doesn’t want to list you on their insurance, but you regularly drive their car.
Keep in mind that the address where the car is parked the majority of the time should be listed on the owner’s insurance policy. Also if you live with a person and aren’t listed on their insurance policy, they may have any claims for damages caused while you’re driving denied.
If you have an SR-22
This certificate states you are carrying the state’s minimum liability insurance if you’ve gotten into trouble and require it. This is not considered insurance but provides documentation that you have liability.
However, not every company allows you to file an SR-22. You might be required to obtain nonowners insurance if you intend to drive, even if you don’t have a car.
Between vehicle ownership
If you’re applying for a driver’s license, some states require proof of financial responsibility even if you don’t own a car. So, even if you don’t plan on driving regularly for a period of time, you might want nonowners insurance to avoid having a gap in your insurance coverage.
What is insurable interest?
Typically, if you own something — in this case, a car — you’re considered to have insurable interest in that item, giving you a stake in what happens to the car. If the car were to be damaged, totaled or stolen, you would suffer financial loss.
Most insurance companies won’t insure your car if you cannot prove insurable interest, which can be difficult if you aren’t the owner.
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What does nonowner car insurance cover?
Typically nonowner auto insurance only provides liability coverage, not optional coverage like damage to the car, rental reimbursement or medical expenses. Protection against damage to the car you’re driving will need to be covered under the car owner’s policy with collision insurance.
But on the plus side, this type of insurance usually costs significantly less than a typical insurance policy, based on the assumption that you’ll be driving less and thus be less likely to have a wreck.
How to get nonowner car insurance
If you’re having trouble getting a nonowner car insurance policy with your current insurer, you have a couple options.
Option 1: Add your name to the title
In some states, your name must be on the car’s title in order to insure the car. In this case, the simplest thing to do is add your name to the title or transfer the title to your name.
But beware — fully transferring the title to your name comes with high taxes. If the owner gifts you the car you may be able to avoid those taxes. If you’re unsure about what costs you might be on the hook for, consult with a tax professional before going transferring the title.
Option 2: Prove to your insurer you need the car
Some car insurance companies will bypass their own rules if they see there’s a definite need for the car in the driver’s life. Explaining to the insurer that you need the car to drive to and from work every day because there’s no public transportation available to you, and that you’ll have constant control of the vehicle, is typically enough to get them to write you an insurance policy.
If you live in a state where your name isn’t required to be on the registration, convince the insurance agent that you have a financial stake in the car. Be honest about your current situation and explain why you’re not able to own a car at this time but need to drive one.
Proving you have a job you need to drive back and forth to, children you need to take to and from school or some other reason will help make your case to the insurer.
Shop around until you find the right company
If none of these options work for you, there are a few insurers out there that will write you an insurance policy, but shop around. If one company refuses you, ask for specific reasons why to help you improve your case for that insurer or another one.
How to apply for nonowners car insurance
Applying for nonowners car insurance is fairly straightforward once you’re able to secure an insurer that will write the policy.
- Call your chosen or current insurer and inform the agent that you need a nonowners policy.
- Give the agent the driver’s information and whether an SR-22 is required. In most cases, the insurance company files an SR-22 directly with your state.
- Confirm coverage and set up payments to begin coverage.
- Wait for proof of insurance and keep it in the car.
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Why is it so hard to insure a car that’s not mine?
If you don’t have insurable interest, then it’s hard for insurance companies to outweigh the risk of insuring someone who doesn’t own the car. The person driving the car could easily just damage the car themselves if the owner ever gets on their bad side.
And to take it even further, if insurance companies were willing to insure cars that an individual didn’t own, then what would stop someone with a bad driving record to ask their friend to insure their car for them, in order to get a lower rate. This can easily get car insurance companies into very tricky territory.
Does the car’s owner have to make the car insurance payment?
If you’re able to convince the owner of the car to add you to their insurance policy, this doesn’t mean they have to make the payment each month.
Make the monthly insurance payment for the owner of the car yourself. You can even set up automatic recurring payments.
While you might be able to find a way to get insurance for a car you don’t own, it might be difficult to find the optimal solution for you and the car owner. The key is to prove to insurance companies that you need to use the car and you have to be the one to set up the insurance.
Compare all car insurance companies to find the right one for your situation.
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