Can you insure a car you don't own?

Depending on your personal situation, there are a few ways to insure a vehicle you don’t own. The easiest solution is to add the owner of the vehicle to the insurance policy as an additional interest. Another solution is to add yourself to the vehicle owner’s insurance policy. A third solution is to buy a non-owners policy.

Let’s explore the situations in which these solutions are appropriate.

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

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

This is typically the easiest way to insure a vehicle you do not own. An additional interest does not 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 insurance companies will allow you to do this. If your current provider does not, consider it a good opportunity to shop around for auto insurance. Enter your zip code below to see get car insurance quotes 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 insurance companies do not like to cover drivers who live at addresses other than the one listed on the policy. The insurance company 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 will allow this, but many will not.

Another issue is pricing. By adding yourself to their policy, you will increase the premium. Regardless of your driving record, adding another driver or vehicle will increase the monthly rate. Most insurance companies 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-owners insurance policy

A non-owners 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. If you borrow a friend’s vehicle for a day and get into an at-fault accident, totaling another vehicle, your non-owners policy would only apply if you exhaust the property damage liability coverage carried by your friend.

A non-owners car insurance policy doesn’t provide physical coverage for your vehicle, i.e., collision and comprehensive insurance. Because you’re insuring a figurative 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.

At the end of the day, your choice will be based on your personal circumstances. If you’re not sure and want to email one of our licensed agents, click here for a response within 48 hours.

Otherwise, enter your ZIP code below to compare personalized prices.

Additional resources

• What is a non-owner insurance policy?
• Underinsured motorist coverage
• How much insurance coverage do you need?