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If you frequently use a family member’s car, you may want to buy car insurance for it. While you might be able to get insurance coverage on a car that’s not registered in your name, it won’t be easy.

Here’s what you need to know about insuring a car that you don’t own:

Can I insure a vehicle I don’t own?

Yes, you can insure a car that’s not registered in your name. But it depends on your insurance provider and its underwriting guidelines. You may be able to add your name to the car’s title. Another option is to buy non-owner liability insurance that protects you while you drive a vehicle that’s not yours.

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Challenges of insuring a vehicle you don’t own

Due to limited coverage options, it can be difficult to insure a car you don’t own. Here are a few of the challenges you might face:

Proving insurable interest

Insurable interest protects the primary policyholder against financial loss. It shows your car insurance carrier that you care about the vehicle and are motivated to keep it in good condition. If you’re not the owner of the vehicle, it’ll be tougher to prove insurable interest. Many insurance providers may be hesitant to insure you due to potential fraud.

Claims can be difficult

If the car gets totaled as a result of a serious car accident, you can expect a complicated claims process. Depending on the car insurance carrier and other factors, the owner may not receive the money. The funds might go to you or the person that insured the vehicle instead.

State laws

Car insurance laws vary from state to state. Some states require the name on the car’s registration to match the one on the insurance policy. In New York, for example, the name on an insurance card must match the name on the registration.

Check Out: How to Get Car Insurance Without a License

Alternatives to insuring a car that’s not in your name

Instead of going through the hassle of insuring a vehicle you don’t own, you may want to consider these options:

  • Have the title transferred to you/buy the car. If you decide that you want to buy the car, you can transfer the title to yourself.
  • Ask to be added to the current policy. If the car owner’s auto insurance provider allows it, ask the owner to add you to their insurance policy as a driver. If you live with them, this process should be fairly easy.
  • Ask to be added to the car title. You can also add your name to the car title as a partial owner. Keep in mind that this might not be possible if there’s still a loan on the vehicle.
  • Utilize a non-owner policy. Non-owner insurance is designed to cover drivers who drive someone else’s vehicle but don’t have their own coverage. You may want to go this route if you rent or borrow a car every once in a while.

What you should know about insurance and a company car

If you have a company vehicle through your employer, you may be wondering if you need to buy a policy. Typically, your employer will be the owner of the vehicle and add you to their business auto insurance as a driver. You shouldn’t have to take out a personal policy on a company car that isn’t yours.

But if you own a business and buy a company vehicle, business auto insurance will be your responsibility. You’ll need to insure the vehicle as a business car instead of a personal one. If your business owns the vehicle, the car insurance coverage must be in the company’s name.

Learn More: How Long Do Car Accidents Stay on Your Record?

Why it’s important to keep your insurance provider in the loop

If you have to get car insurance for a vehicle that’s not yours, you’ll need to look into which insurance providers are willing to offer you a policy. Your goal should be to help them understand you have a financial stake in the car. To do so, you might explain that you depend on the vehicle to get to work or school.

No matter your situation, always be honest with your insurance carrier. Not only is lying to your insurer illegal, it can void your policy and make it difficult for you to get car insurance in the future. This is because insurance providers work to mitigate risk, and anyone who lies to them is considered risky to insure. If an insurer finds out you lied to them after an accident, you might be responsible for the damages and your insurer may cancel your policy.

Frequently asked questions about car insurance

Here are the answers to some of the most commonly asked questions about car insurance.

How much is car insurance?

The average cost of car insurance in the U.S. was $1,070 in 2019, according to the National Association of Insurance Commissioners. However, the cost of car insurance varies greatly and depends on a number of factors, including:

  • Age: In general, the lowest car insurance rates are reserved for experienced drivers. You can expect to pay more for your policy if you’re a teen or haven’t spent much time behind the wheel.
  • Driving record: If you have a history of serious traffic violations, like speeding tickets, at-fault accidents, and DUIs, you can expect to pay more for a car insurance policy than someone with a clean driving record.
  • Credit: Believe it or not, your credit can impact your car insurance rates. Since studies show that those with good credit are less likely to file claims, a strong credit history can lower your premiums.
  • Coverage: While most states require basic liability insurance, you may choose to invest in additional coverage that can increase your cost. This might be comprehensive coverage, accident forgiveness, GAP insurance, or rental reimbursement coverage.
  • Deductible: Your deductible is the amount of money you pay out of pocket toward a claim. A higher deductible leads to cheaper premiums, while a lower deductible means more expensive rates.

How much car insurance do I need?

Most states require car insurance — except New Hampshire and Virginia. In the other 48 states, you’ll need at least the required minimum liability coverage in your state, which will pay for any property damage and bodily injuries you cause to others in an accident.

If you live in California, for example, you’ll need $15,000 per person and $30,000 per accident in bodily injury insurance, plus $5,000 per accident in property damage insurance.

You might also decide to buy additional coverage, like comprehensive and collision insurance, uninsured and underinsured motorist insurance, and medical payments (or MedPay) insurance. These optional policies can give you some extra peace of mind.

Should I buy car insurance if I don’t own a car?

Sometimes, it might make sense to invest in an auto policy if you don’t own a car. Here are some scenarios in which you may want to go this route:

  • You’re a college student and drive your parents’ vehicle to college.
  • Your elderly relative no longer drives but lets you borrow their car.
  • You rent cars frequently.
  • You want to maintain car insurance so there are no gaps in your coverage history.
  • You use car-sharing services.

You don’t need to buy car insurance if you drive a company vehicle for business purposes, the vehicle you borrow is covered under an insurance policy of someone you live with, or you don’t have a driver’s license and don’t plan to get one in the next 30 days.

Can I buy temporary car insurance?

Not many car insurance carriers offer temporary insurance. But if you drive a vehicle you don’t own, you may want to explore these options:

  • Non-owner insurance: Non-owner insurance provides liability coverage for any property damage or bodily injury you cause when you’re driving a car you don’t own. It might also include medical payments coverage or personal injury protection, which pays for medical costs.
  • Rental car insurance: Rental car insurance is designed to protect you when you drive a rental car. You can buy it from your car insurance provider, credit card issuer, or rental car company.
  • Get added as a driver on someone else’s policy temporarily: The owner of the vehicle can add you as a driver on their insurance policy. However, they may remove you when they want to.

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About the author
Anna Baluch
Anna Baluch

Anna Baluch is a personal finance freelance writer with years of experience writing for well-known media outlets in the business and personal finance space. Her work can be found on media outlets like The Balance, Freedom Debt Relief, LendingTree, Credit Karma, Nav, and RateGenius. She holds a bachelor’s degree in marketing from Northwood University and an MBA from Roosevelt University.

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