Can You Insure a Car You Do Not Own?
In most states, any vehicle driven on the road has to have insurance. Most of the time, the person who owns a car will buy his own insurance. Sometimes, however, people want to buy insurance when they aren't the owner of a vehicle. It may be harder to do this than buying insurance for your own car, depending on your location and the company you use, but generally, you can insure a car you don't own.
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Insurable Interest
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To insure a car you do not own, you usually must show that you have an "insurable interest" in the vehicle. Insurable interest means that you might be impacted by misuse, theft or other loss related to the car. For instance, if your child lives with you and owns a car they use to contribute significantly to the household income, you would be financially hurt if the car was stolen or damaged. Insurable interest laws are designed to prevent people from purchasing policies with the intent of committing fraud.
Names on Policy
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In some cases, you can insure a vehicle you don't own, but you have to be listed on the insurance policy. Usually this means that the owner of the vehicle has to give their consent.
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Umbrella and Non-owner Policies
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Umbrella policies provide coverage to you no matter what car you drive. They typically are add-ons to existing auto insurance policies. These policies work well for cars you rent, for example, but they also can work for non-rented vehicles. A similar type of policy is a non-owner policy. These policies are for people who don't own cars but who still want to drive. They'd cover you if you got in an accident with a friend's car, for instance. The caveat to these policies is that they usually only provide liability coverage -- they don't include collision coverage.
Paying the Owner
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If you can't prove insurable interest, a simple way to solve the insurance conundrum is to give the money you'd use to pay the insurance premiums to the owner of the car. The owner then can use the money to pay the premiums. This way, you can insure any vehicle you want and get coverage for everything you think you need. You also won't need to be on the policy. Parents often do this for children who are still at home when they get their first car.
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References
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