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Can I Insure A Vehicle That Is Not Titled In My Name?

Updated on February 24, 2011

I think that this question comes up a lot.  Some people drive cars that are their parents or a friend will let them drive a car that they own.   It's going to depend a lot on the Insurance Company in this situation.  I have heard that most insurance companies do not allow you to insure a vehicle that you do not own.   Each insurance company has it's own rules so it's good to check around and ask if it's allowed or not.  At the company I previously worked for it was allowed in some cases.  It was allowed with an "Owned By Endorsement".

What's An Owned By Endorsement?

An owned by endorsement is something that you can add to an insurance policy to allow you to insure the vehicle if it's not titled in your name.  Typically you need to have insurable interest in something in order to insure it.  Insurable Interest is when you would have a financial loss if something happens to whatever it is that your insuring like a car or home.    The owned by endorsement actually adds the titled owner of the vehicle to your insurance policy.   They are listed as the owner of the vehicle and therefore would be the ones who receive any payout on any claims if there were any.   Since your not the owner you wouldn't be out anything if the vehicle were to be involved in an accident and totaled out.  But the owner of the vehicle would be since they own the vehicle.

When you add an owned by endorsement to your policy they will run the owner's information as well.  They have to be able to qualify for insurance too.  So if they have a poor driving record and wouldn't normally qualify for insurance then you won't be able to get insurance on the vehicle either.  Why?  Because if they own it, they can drive it whenever they want to.  They are a liability risk too.  You might be the rated driver on the policy and the one paying the insurance premiums but it is in fact their vehicle.

Can My Parents Insure My Vehicle?

Everyone knows that this happens all the time.  You live with your parents and you have your insurance under their policy and sometimes even in their name because it's often cheaper.  Just because it happens all the time doesn't mean that it's always allowed.  If your the titled owner on your vehicle and your the one driving your vehicle then you should have the insurance in your name.  Now maybe your away at college and you don't need your vehicle, so your letting your parents drive it and insure it.   They should be able to add an owned by endorsement to the policy for you (assuming you qualify).  Do keep in mind, that you're liable for whatever they do with that vehicle tho, because you do own it.

I Drive My Parent's Vehicle, Can I Stay On their Policy?

If your living with your parents and your on their insurance policy then it's usually not a big deal.   You would want to make sure that your the rated driver listed on the policy for the vehicle that you're actually driving, but the fact that it's in their name usually won't matter.  They are liable however, for anything that you do in that vehicle.

It usually becomes an issue with insurance companies when your not living with mom and dad. Your insurance policy usually covers the named insured (person named on the policy) and all resident relatives living with you.  So that's why it doesn't matter who's name is on the insurance when your living with mom and dad.  But, if your not living with them, then your no longer a "resident relative" and certain parts of the policy might not fully extend to you.  It's just a good thing to ask the insurance company about to make sure your fully covered.  You wouldn't want to be in an accident and find out that the medical doesn't extend to you because your no longer a "resident relative".  So it's just best to be 100% sure!

Is It Cheaper To Be On My Parents Insurance?

It just depends on the driving record of all the individuals involved.  Sometimes it can be cheaper to stay on your parents insurance because they might be getting a multiple line discount if they have other cars and their home insured together.   Sometimes it can be cheaper to branch off of their policy into your own.  I definitely saw a lot of scenarios while I was working in the Insurance Industry, but this question seemed to come up the most.

Maybe you have a clean driving record but mom has had an accident and dad has a couple tickets, then you could be paying more for your insurance than you would be paying for if your were on your own policy.  It's a good thing to just have them quote you.  It only takes a few minutes for them to quote you your own policy.  I know at the company I worked for you were even able to transfer your "longevity" discount with you.  A Longevity discount is called all sorts of things, but it's basically a discount that the insurance company will give you  for staying with them for a long period of time and being accident free.   At the company I worked for, they were called Accident Free Discounts.  They ran like this:  3 Years, 6 Years and 10 or more years.  If you had been with the company for 3 years and did not have an accident then you received a 10% discount on your auto insurance, If it was 6-9 years then you received a 15% discount, and 10 or more was a 20% discount.

Parents were also allowed to assign over an AFD (Accident Free Discount) that they had accumulated on their policy.  So say your parents had a vehicle insured for 5 years, then you start driving and after 5 years you decide to get your own policy, they could carry over that 10 year AFD to your policy.  A nice way to help lower your premium when your a young driver too!

There are a lot of What If's and different scenarios that come up when discussing insuring a vehicle that's not titled in your name.  Like I mentioned before, each insurance company can make their own rules an their own endorsements.  There are all sorts of them out there, several that I have not even covered.   UNOC (Use of  Non-Owned Car) for example.   So it's best to talk to your insurance agent so they can help you determine exactly what type of coverages that you need.  You don't want to have a claim and find out that you "Should of Carried" something that you didn't have.

I'm sure there are several questions regarding these topics discussed.  If you have any questions just let me know and I'll do my best to get you an answer.


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