How to Insure a Car You Don't Own

Can you insure a car you don't own?

In short, yes, though the process can be challenging. Insurance companies almost always require that a policyholder have an insurable interest — or a level of ownership — in the vehicle being insured. Otherwise, there is very little motivation for the policyholder to take good care of the vehicle. However, there are a number of solutions depending on your personal situation.

The first, and easiest solution is to add the owner of the vehicle to the insurance policy as an additional interest. Other solutions include adding yourself to the vehicle owner’s insurance policy or simply buying a non-owners policy. Have a look at our breakdown of these options to see if they might work for you.

 

Insuring a car you don't own — table of contents

1. Adding an additional interest to your policy
2. Adding yourself to the owner’s policy
3. Buying a non-owner insurance policy
4. Further options

 

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Adding the vehicle’s owner to your insurance policy as an additional interest

Adding the owner of the car is typically the easiest way to insure a vehicle you do not own. Listing the owner as an additional interest does not actually raise the cost of a car insurance policy, it simply states someone else has an insurable interest in the vehicle. This is similar if you had a loan on the vehicle: much like a bank, the owner still has a financial stake in the vehicle even if they don't drive it. The bank — or owner — has control over the level at which the vehicle is covered. If you total or damage the vehicle, the claims check would be written to the owner.

Most car insurance companies will allow you to do this. However, if your current provider does not, consider this a good opportunity to get new car insurance quotes personalized for you.

Bottom line:

• If you’re living away from the primary owner and need your own policy, list the vehicle's owner on your insurance policy as an additional interest.

 

Adding yourself to the owner’s policy

This is a good option if the owner uses the vehicle while sharing a residence with you. Otherwise, there are some downsides. Most auto insurance companies do not like to cover a driver who lives at an address other than that listed for the policyholder. The insurer might require you to live with the owner in order to be covered.

This is due to risk. Every ZIP code comes with its own risks and its own insurance premiums. If a vehicle is parked for the majority of time in a ZIP code other than the listed residence, it is subject to a different set of risks. Some insurance companies may allow this, but many will not.

Another issue is pricing. By adding yourself to their policy, you will increase the car insurance rates. Regardless of your driving record, adding another driver or vehicle will increase the monthly insurance cost. Most insurance providers cannot separate out your “part” of the insurance bill. Each driver's record and profile is rated across all vehicles covered by the policy.

Bottom line:

• You must live at the same address as the primary owner to share an insurance policy.
• You will increase the premium on the shared policy by adding yourself as a rated driver.
   

Buying a non-owner insurance policy

A non-owner auto insurance policy is a liability insurance policy designed for people who drive another person's vehicle sparingly but do not have insurance themselves. This coverage will usually work as a complement to the vehicle’s primary policy. For instance, ff you borrow a friend or family member's vehicle for the day and get into an at-fault accident, totaling another vehicle in the process, your non-owners policy would only apply if you exhaust the property damage and bodily injury liability coverages carried by your friend.

A non-owner car insurance policy doesn’t cover damage to the vehicle, i.e., collision coverage and comprehensive insurance. Because you are not technically insuring any single vehicle with this coverage, an insurance company cannot rate physical coverage.

Bottom line:

• Non-owners insurance does not cover physical damage to the vehicle, providing liability insurance only.
• A non-owners policy may be a good idea if you don’t own a vehicle but commonly borrow a car from a friend or relative.

Further options

Drivers may have a few additional options when it comes to insuring a car they don't own, but they are not as common. The first could be to simply have your name added to the vehicle's title. However, this can be difficult unless the car is fully paid off. Perhaps even more difficult is the option to demonstrate need to your insurance company. This usually requires a non-owner to show the insurer that they rely on the vehicle as a primary means of transportation to and from work or for other important needs. 

At the end of the day, the auto insurance coverage choices you make will be based on your personal circumstances. If you’re not sure about your options, use The Zebra to compare personalized insurance prices.