How to Insure a Car That Is Not Financed in Your Name
Insuring a car that you do not own, that is not registered in your name may be a complicated matter. This is because insurance law prohibits insurers from selling policies to individuals for vehicles they do not have insurable interest on. This law restricts the opportunity for fraud that arises when an individual buys an auto insurance policy for someone else, solely for the purpose of making a profit when the insured party is involved in an accident. Although some insurers may sell you auto insurance for an automobile that belongs to someone else, most insurers will not even consider selling such a policy. For the small percentage of companies that will allow you to buy auto insurance for a car you do not own, you will have to satisfy various requirements and demonstrate insurable interest.
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Instructions
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Conduct an online price comparison. The first step in purchasing auto insurance for a vehicle you do not own is the same as for a vehicle registered in your name. Visit several car insurance sites, fill in the particulars and compare prices quoted by different insurance providers. Notable car insurance websites include "Carinsurance.com" and "Carinsurancequote.net." Once you have narrowed your list of insurance providers, you will have to contact each one individually.
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Contact several providers and inquire about the company's guidelines. Since most insurance providers are reluctant to sell insurance to non-owners to reduce the risk of fraud, you will have to discuss your situation and determine which of the companies will allow you to buy insurance for a vehicle registered in someone else's name. Insurance providers may consider selling you a policy if the original owner of the vehicle is a close family member, or if the car in question is in transition--that is, in the process of changing ownership.
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Determine how to demonstrate insurable interest. If a provider is willing to sell you a policy, you would have to verify that your reasons for insuring someone else's automobile is legitimate, and not geared toward profit. Talk to the insurer and find out what documents to provide to demonstrate insurable interest. If the owner of the vehicle is family member, such as your father or teenage daughter, you may provide documents to verify that both of you live in the same address or have the same last name. If you want to insure a vehicle you recently purchased, and the title of the vehicle is still in the original owner's name, you may have to provide evidence of purchase, such as a sale contract.
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Provide the required documents to demonstrate insurable interest. In addition to the documents, you would also have to obtain express written consent from the vehicle's owner, permitting you to buy a policy on the car. Collect the documents and provide them to the company. The agent you are dealing with may help you in gathering and preparing the necessary paperwork.
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Determine whether to include the owner in the policy. The company will require you to either include the registered owner as the driver, or entirely exclude from coverage. If you decide to exclude the driver, you will have to sign a formal contract stating that the insurance company will not cover the driver unless you personally add the driver.
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Tips & Warnings
In some cases it may be impossible to demonstrate insurable interest that will satisfy the insurance provider's requirements. In situations like this, consider talking to the vehicle owner and becoming one of the owners. If this is not an option, the owner may buy the insurance policy but you would pay the premiums to the owner, who would then pay it to the company.
References
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