insuring a car

Insuring a Car That Doesn’t Belong to You

Owning a car is a responsibility. You’ve got to be licensed, maintain, keep it registered, and drive safely. Although laws vary from state to state, you also have to have it insured. There are minimal amounts and types of coverage that are usually higher if your vehicle has a lien on it. Your local DMV can give you the details about insurance requirements.

You shouldn’t drive any motor vehicle if it’s not insured. Even if you are involved in an accident that’s not your fault, if the other driver isn’t covered, you will have to pay out of pocket until you can recoup your losses through an expensive lawsuit. If you are at fault and held liable, you need coverage to pay for the damages and injuries of the other driver and any third parties. That can add up.

Kinds of Insurance You Need

It’s important to make sure any car you drive is insured, even if it’s not yours. You may be wondering can you insure a car you don’t own. You can, with the right parameters. There are types of coverage every car should have.

  • Liability Coverage – Liability, as its name implies, covers you in situations in which you are held liable. It pays for damage to other vehicles involved in an accident as well as property damage. It also covers medical expenses for other drivers, passengers in your vehicle, as well as third parties who are injured as a result of the accident.
  • Collision Coverage – Collision covers the expenses of repairs to cars involved in a collision accident. In most states, you don’t need collision insurance if you own your car outright, but if you have a lien, it is required.
  • Comprehensive Coverage – Comprehensive covers damage to vehicles that do not occur as a result of a collision. This would include theft, vandalism, weather, or accidents caused by striking an animal.
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Insuring Someone Else’s Car

Most auto insurance companies will allow you to ensure someone else’s car. It may be a car that you borrow that the owner cannot afford to cover. Insurers usually require a condition called insurable interest. What this means is that the value of the car and protecting that value are important to you. You may be helping make payments or need it to get to work and earn a living. Insuring someone’s else car can be done in four ways:

  • By adding yourself as a driver to the insurance policy held by the owner of the car.
  • Adding the owner of the vehicle as an additional interest to your policy.
  • Transferring the registration to you.
  • Buying a non-owners policy.

A driver with a poor driving record that raises insurance rates and would like premium savings can transfer the registration to a driver with an excellent record and let that driver purchase the policy.

Having one’s own transportation offers a sense of freedom and makes getting around so much easier. Owning a car does require insuring it in compliance with the laws of your state. You can, under the right circumstances, insure someone else’s car. No matter what you drive, having it insured is important and will protect you.

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