Does the Auto Insurance Have to Be in the Name of the Car Owner?

This is one of those infrequent questions but the answer is really quite obvious when you stop to think about it.

Just think back to the time you asked to borrow your dad’s car – now dad may have added you to the auto insurance policy but unless you were one of the lucky few, he hadn’t given you title to the vehicle.

Now we have dispelled that myth you will probably be able to think of several other instances where the car owner and the insured driver are not the same people.

How many times have you rented a car on holiday or on business?
How many times have you borrowed a vehicle from a friend?
How about when you drive a vehicle provided by your employer?

The simple fact is that the car owner and the person with the auto insurance do not have to be the same person. This leads to some interesting and often overlooked practicalities with life on the road as well as opening up some opportunities to make life easier and cheaper for you as a non-car owner.

If you do not own your own vehicle, say because you live in a big city where there is a good mass transit system and parking your car would be difficult if not impossible, then you still can save a great deal of money and make your driving life that much better by taking out an auto policy. You may be thinking, “Hang on a second, I don’t own a car but I should take out an auto policy – that makes no sense!”

Try this for size; you rent a car when you go on vacation, occasionally for business and other odd times when you want a break from the city. Renting a vehicle requires you take out auto insurance and through the car rental agency this is both expensive and geared towards protecting the agency and the car while not necessarily giving you the cover you really need. It makes a lot of sense to arrange your own auto insurance policy that provides the coverage you really need and protects you first and foremost. Taking out auto insurance for yourself is also a lot cheaper than taking out the insurance with a car rental agency so it makes sense for your wallet too.

How about when you want to borrow a car? Your dad probably put you on the insurance for the old family car but what about when you want to borrow a friend’s ride? It’s not so simple to put you on the policy of someone else especially if it is a last minute, “Can I borrow your car for an hour?” type scenario. Having your own auto insurance prevents these complications right from the start and protects you, your friend and their car.

Finally, there is an additional incentive to take out your own auto insurance policy as a non-car owner. Premiums are calculated based on your age, location, vehicle and of course, how long you have held insurance and your claims record. Taking out a policy and establishing a track record for yourself is an excellent means of keeping premiums down in the longer term so it makes financial sense to effect a policy as soon as you start driving.