There are many cases when you may need to insure a car you don’t own. Whether you regularly drive your family vehicle, occasionally borrow your friend’s car, or are still making loan payments on your four-wheeled auto, a non-owner car insurance policy may be what you need for confident driving and peace of mind behind the wheel.
But here’s the catch: in the United States, it’s not that simple to insure a car you don’t own. In the insurers’ eyes, a non-owner is not interested in keeping the vehicle in good condition and therefore poses higher insurance risks.
That said, there are still enough legal ways to insure an auto even if you are not its titled owner.
What is Non-Owner Car Insurance?
Non-owner car insurance is secondary liability coverage that reimburses for damage and bodily injuries sustained by others in a car accident. Also, non-owner car insurance covers the cost of legal defense.
Read on to learn five possible ways to insure a car you don’t own.
Five Common Ways to Insure a Car You Don’t Own
1. Add Yourself to the Owner’s Policy
The easiest way to insure a car you don’t own is to ask the car owner to add you to the policy, especially if you live in the same residence.
Depending on the circumstances, the car owner can add you as a permissive use driver (if you drive occasionally) or primary driver (if you drive regularly). Owners who no longer drive can list themselves as excluded drivers while adding you to the coverage.
Note, however, that inclusion in the owner’s policy will inevitably increase the premium. The exact amount of increase will depend on the ZIP code of the residency and where you drive the car most of the time.
2. Add Yourself to the Car Title
Getting added to the car’s title – that is, becoming a co-owner of the car – is a sure way to get insurable interest in your auto insurer’s eyes and all the benefits that a full-fledged car owner receives from their policy.
Having insurable interest will allow you to buy a car insurance policy without a hitch. For example, if your parents gifted you a car, then – provided you have insurance interest – you can take them off the policy and buy your own insurance instead.
However, if you are still paying a loan on your auto, you can only be added to the car’s title after the vehicle is paid off. In this case, to purchase your own policy, you will have to transfer a title to yourself and put the seller as a lienholder on the title (upon the seller’s permission).
3. Add the Car Owner as an Additional Interest
An additional interest is someone who has a vested interest in a car (for example, a lienholder), can request some types of coverage, and must be notified of any changes to the policy.
Listing the car owner as an additional interest is one of the simplest ways to insure a car you don’t own, but it is not allowed by all insurance companies. On the bright side, having an additional interest on the policy won’t affect the premium.
4. Prove Your Need for Car Insurance
If none of the above worked for you, you may try to persuade your insurance company that you need auto insurance. Maybe you’re driving too often not to have car insurance, or you cannot afford your own car, or there are no other transportation options to get to a destination point. This option gives you a fighting chance to get insurance.
5. Buy a Non-Owner Car Insurance Policy
To insure a car you don’t own, you can buy non-owner insurance coverage, which usually includes:
- Damage (property damage, car repairs, etc.) and bodily injuries (for example, medical expenses) caused to others if you are at fault for the accident
- Costs of legal defense
On top of that, non-owner car insurance may also include optional coverage, such as:
- Medical payments: you and your passengers’ medical expenses regardless of whether you are at fault for the accident
- Uninsured motorist coverage: your medical expenses if the at-fault driver doesn’t have enough liability coverage
Important: non-owner car insurance is secondary coverage, meaning it only covers what primary vehicle insurance cannot cover. For example, if you borrowed your parents’ car and caused an accident, then your non-owner vehicle insurance would only kick in after your parents’ primary policy and only if it would not be enough to cover the expenses.
Exclusions to Non-Owner Car Insurance
Common exclusions for non-owner insurance policies are third-party drivers, damage to the policyholder’s car and injuries sustained by the policyholder, personal belongings, and business driving.
When You Need and Don’t Need Non-Owner Car Insurance
Whether you need non-owner car insurance largely depends on how often you drive a car that is not registered to you. If you rent cars often, use car-sharing services regularly, or want to close a gap in your vehicle insurance, then a non-owner auto insurance policy can be your savior.
On the other hand, if you already own a car, rarely drive a borrowed car, or the borrowed auto belongs to someone from your household, then you can most likely do without a non-owner auto insurance policy.
Best Non-Owner Car Insurance Providers in the United States
Whether a particular auto insurance provider will sell you non-owner auto insurance depends on the state, whether you already own a policy with the provider, and other factors. In general, many renowned insurers offer non-owner policies, including USAA, State Farm, and Nationwide.
Can I Insure a Car I Don’t Own?
Yes, you can insure a car you don’t own in most cases.
Is It Always Possible to Insure a Car I Don’t Own?
Rules vary from state to state. For example, in New York, you cannot insure an auto you don’t own, whereas most other states will allow you to insure a car you don’t own.
How Can I Insure an Auto I Don’t Own?
There are at least five ways to insure a car you don’t own:
- Add yourself to the owner’s policy
- Add yourself to the car title
- Add the car owner as an additional interest
- Prove your need for car insurance
Buy a non-owner car insurance policy
Oleksandr is an expert in deep research. He covers insurance topics across four major insurance verticals – auto, health, life, and home insurance – while taking into account the legal landscape of the state in question. Come rain or shine, you can expect regular quality blogs and timely updates from Oleksandr.