Can my car insurance be in someone else’s name?
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UPDATED: Sep 13, 2021
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Your car insurance can be in someone else’s name. However, it may not be the best option. When you have someone else insure your vehicle, you may not get the coverage you need. For example, let’s say you purchased a new car and are paying on the loan. The individual that you asked to insure your car only purchases liability coverage. If you are in an accident and the accident is considered your fault, you would be responsible for paying for any car repairs out of your own pocket.
In order to cover the cost of damages done to your own vehicle, you would need collision coverage, but the person insuring your vehicle may not know that. Being in control of your own vehicle is incredibly important, and could save you a lot of heartache.
Start comparing car insurance rates now by using our FREE tool above! Instead of letting someone else control your car insurance, it is best to get multiple quotes using a comparison tool and purchase your own car insurance.
What are some reasons people get their cars insured in someone else’s name?
There are numerous reasons where someone might want to get their car insured under someone else’s policy. The number one reason is to get better rates. High-risk drivers often ask relatives with better driving records if they could insure their car for them. This results in a lower premium for the high-risk driver, but the premium charged doesn’t adequately assess the risk posed by the high-risk driver. Over the long-term, this could result in higher rates for everyone insured at that particular insurance company.
- Better Rates
- Teenage Child Needs Car Insurance
- The Individual Lives Under the Same Roof
- A high-risk driver cannot afford his or her own insurance policy
Payment might not always be the driving force, but it is common. Auto policies aren’t the cheapest, and since there are various types of coverage, it can also get confusing. If you’re struggling to fit a budget, buddying up may seem like a win-win. However, as stated above, the long-term might not see the savings you were hoping for. Separate policies may end up being the cheapest option.
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What are the complications with insuring someone else’s car?
While insuring a car for someone else is legal, it may not be allowed by the insurance company. Insurance companies must assess the risk of each driver. If a policy holder insures a car for another driver, even if it is a family member, that could increase the insurance carrier’s risk because the driver may use the vehicle for a purpose that isn’t covered by the policy.
For example, a parent insures their teenager’s car under their policy. This can simplify the insurance process for both the parents and the teenager, especially if the parents are initially paying for the teenager’s policy. It can be helpful if they get into an accident, being less costly than if they had their own policy. The parents may end up paying more on their premium, but it could still end up being less than if the teenager had to pay for damages.
Unfortunately, the parents may not think to change the policy when the teenage driver goes away to college. If the college is located in another town or city, the local area may have different insurance rates, due to high crime or a larger population. If the child were to get into an accident that involved an injury or damages, or the car was stolen, the insurance company may be hesitant to accept the claim. Some things to keep in mind:
- Insuring someone else’s car is not illegal
- Some insurance carriers refuse to insure cars that are not registered in the policy holder’s name
- Insuring someone else’s car can increase the risk of the policy holder and the insurance company
- The best solution is to have the car owner get insurance in his or her name by using a comparison tool
What are a few reasons to purchase your own policy?
While it may be tempting to have someone else insure your car, it may not be wise. What if the policy holder lets their car insurance lapse? You could find yourself without car insurance and wouldn’t know until the DMV contacted you or you tried to file a claim after an accident. To avoid unintentional consequences, you should purchase your own car insurance policy.
How do you go about getting your own policy?
The best way to stay in control of your car insurance and the amount of coverage you have is by purchasing your own auto insurance policy. When you purchase a policy and list yourself as the primary driver and owner, you can make sure that the coverage amounts meet your needs and your monthly budget. To start the process, there are a few different comparison tools out there you can use; make sure to input your information as accurately as possible. This will ensure that you get accurate quotes so that you can make an informed decision.
Once you have the quotes, you need to look at the policy amount and the coverage amounts.
Since there are different coverage options, look into what will work for you and the vehicle you own. If you are purchasing comprehensive and collision insurance instead of liability insurance, you should also look at the deductible amounts. Raising your deductible can lower your insurance premiums, but you should never pick a deductible amount that is not financially feasible for you.
When you find the policy that best meets your financial needs and driving habits, you should purchase the policy online and print off your temporary insurance cards. One insurance card should be placed in your vehicle, and one should be kept on your person when you are driving.