Underwriting Guidelines

• There is no clear-cut answer to whether you can insure a car that is not in your name, mainly because each insurance company has its own underwriting guidelines and policies. Underwriting refers to the process of determining whether an application meets company and state standards and what the rates for a policy should be given the liability associated with the insured. At some insurance companies, underwriting procedures prohibit insuring a vehicle if you are not on the title or registration. At other companies, insuring a car that isn't yours is fine. To know for sure if you can insure the car in question, you'll need to contact the company you want to use and ask about its policies.
  
  

Insurable Interest

• Regardless of your insurance company's underwriting guidelines, no insurance company will offer a policy to you if you fail to show insurable interest. Insurable interest means that not having insurance likely would cause you financial hardship if an accident occurred. Because of insurable interest, you probably will have trouble insuring a car belonging to a friend or distant relative. The case for insurable interest is better with immediate family members.
  
  

Exclusion and Addition

• Depending on the underwriting guidelines your insurance company follows, if you do insure a car not in your name, you might have to add or exclude the registered driver--the person who owns the vehicle--from your policy, or you may be required to include him. Some companies require exclusion because normally the registered driver also is the primary driver of the car. If you take out the policy, it's highly likely you, not the registered driver, will be the primary driver. The exclusion lets the company gather a more accurate picture of liability risk, which it uses to determine your policy rate. However, by excluding the registered driver, the registered driver no longer has coverage if he wants to drive the car. In some cases, this isn't desirable, and some states mandate that the owner of the vehicle be on the insurance policy. Some companies thus require you to add the registered driver to comply with state regulations, so the registered driver still can drive the car if he wants to do so. Addition also clarifies insurable interest and shows the company the registered driver is aware of the policy, making insurance fraud less likely.
  
  

Considerations

• Many insurance companies and state regulations allow your insurance coverage to extend to anyone to whom you loan your vehicle, provided the driver has your permission to use the car and has a valid license. These permission clauses sometimes are sufficient to meet occasional driving needs and eliminate the need to get a new policy or add or exclude the vehicle owner. Some companies also offer non-owner policies. However, non-owner policies generally don't provide as much coverage as regular policies.