Can I get car insurance with no title?
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UPDATED: Apr 29, 2022
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- Most companies provide insurance policies for people without titles, though they require you to prove insurable interest
- A non-owner insurance policy is the best alternative coverage for those without titles for the cars they intend to insure
- Insurance policies for people without titles cover only the third party liability and not the comprehensive or collision coverage you need for your vehicle
A title is legal proof of who owns a vehicle, and is just as important as registration.
This can cause a little confusion when it a person goes to purchase coverage, and even though they’re the vehicle owner, their name isn’t shown on the title. However, most auto insurance companies understand that not everyone has easy accessibility to a vehicle’s title. Sometimes the previous owner misplaces it, which results in the buyer having to procure a duplicate title.
The insurance company may not require you to have a title, but they expect you to have insurable interest.
There are clean cut cases however, when you should be given the title. You should be in possession of the title if you bought your car from a dealership for example, because they should have it on file at all times.
What are the conditions leading to the absence of a title?
There are few instances when someone may require a car insurance cover but their names are not on the title:
- You are leasing a car – this means that the car belongs to the leasing company and they have the title.
- Loan to purchase a vehicle – this is one of the most famous cases in the insurance companies. After the completion, the loan company will allow full transfer of the title to your name. In this case, you can let the insurance company know that you are in the process paying the loan for the car.
- A title loan – this is different from when you get a loan to pay for the car. In this case, the owner uses their vehicle as collateral. The lender takes full ownership of your vehicle until you complete the payment of the loan. Your insurer pays the lending company if you get into an accident.
- Inheritance from parents – in this case, you can get insurance for a car without a title. The insurance company would simply require proof of ownership within 30 days since you inherited the car. Some insurers will require you to have insurable interests in it before you register the car without a title.
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What is insurable interest?
Acquiring an insurable interest means that you would suffer financial loss in some way if there was ever damage to the vehicle. In any instance where you are the registered owner, proving that you would suffer some form of loss in case of an accident would be a lot easier than if you’re not the owner of the vehicle.
However, when you are not the owner, such as when you’re leasing the car, the insurance company will require the original owner be present in order to name you as a driver of the car. Some people may think that having a valid driver license is the only thing needed to drive someone else’s car, but sadly that’s not the case. Not only do you need your license, you also technically need to be part of their policy in case of an accident.
When the car is in your child’s name, most insurance companies generally advise acquiring a new registration with the two of you as the registered owners.
Generally, your provider may also ask you to show a proof of insurable interests to ensure that there is no involvement with fraud cases. For example, you could be trying to insure a friend’s car to bail her out of high average rates. If you become caught up in a fraud case, you may be subject to some form of penalty.
Getting yourself added as a driver in the event that you’re in someone else’s car will end up protecting you in the long run. However, you have no rights to adjust that person’s insurance policy.
What is a non-owner policy?
You may consider shopping for different providers online to get the one with the best rates. Some insurance companies give discounts for the drivers who settle for higher policy limits than the state’s minimum coverage.
However, the non-owner insurance policy is not comprehensive, and will only cover damage done due to an accident. It does not cover bodily injury, personal injury protection, or any damage done due to weather, vandalism, or theft. Below are some situations that it does not cover:
- Comprehensive coverage: If you hit a deer or a tree lands on the car, it will not cover those damages.
- The insurance coverage is invalid if you live in the same house as the car owner.
- It does not apply in cases where the insured person drives the car on a daily basis, since they expect the owner to add their name to the policy instead.
How do you inform your insurance provider?
Ensure that you inform your insurance provider if you make changes to the title to avoid mishaps when reporting a claim. There might be some form of title fee, but it’s worth it to have evidence of ownership. Besides, an insurance company may decline covering any losses when you are involved in accidents and they learn that the title hasn’t been switched from the previous owner into your name.
Additionally, they may require you to provide the VIN, which is short for vehicle identification number, of the vehicle that you intend to include in your insurance policy. While obtaining a title or making changes to an existing title may not raise your coverage premium, sometimes adding a vehicle title comes with upfront costs. For the title, registration fee, a new license plate, and never forget about taxes.