Vehicle Insurance: Who Needs To Be Covered?

It is generally required that the owner of a vehicle is the one to insure it. This is because car insurance companies want to ensure the primary policyholder has what is called insurable interest in the car they're insuring. However, there are some exceptions and alternative options. For example, you can co-title a car or add someone as a named insured to your auto policy. If you don't own a car, you can also purchase a non-owner insurance policy, which will provide liability coverage for bodily injury and property damage if you are liable for damages or injuries in an accident.

Co-titling a vehicle

In Colorado, for example, if there is more than one owner of the vehicle, all owners are required to declare their intent to have the Certificate of Title issued in Joint Tenancy with Rights of Survivorship. This can be done by completing the Joint Tenancy with Rights of Survivorship Acknowledgement of Intent form located within the Title and/or Registration Application.

Adding a named insured to an auto policy

In most cases, the owner of a vehicle has to be the one to insure it. Car insurance companies want to ensure the primary policyholder has what is called "insurable interest" in the car they are insuring. Insurable interest means you have a reason to insure a car. If you own the car, the reason is self-evident: the car is your investment, so you have a stake in keeping it from being damaged or destroyed.

However, there are exceptions where someone can get a policy for a car they do not own. One option is to co-title the car and add yourself as an owner. Another option is to add yourself to the owner's insurance policy. This is most commonly done when the owner of the car and the policy live in the same residence as you.

If you live with someone and frequently drive their vehicle, the insurance company may require you to be added as a named insured on their auto policy, or vice versa. A named insured is the person (or people) or business (or businesses) actually named in the policy. There can be more than one named insured, and you can usually find these on the first page.

A named insured driver typically owns the insurance policy on a car they own or lease. They are responsible for making and approving policy changes, verifying claim details, and paying premiums. The insurance company also writes checks to them in the event of a loss. Policies can have more than one named insured driver—a spouse, for example. Additional drivers may be listed on a policy, but only named insured drivers can make changes to a policy. A named insured driver cannot be removed from a policy without their consent.

Non-owner insurance

Typically, the owner of a vehicle must be the one to insure it. This is because car insurance companies want to ensure that the primary policyholder has what is called 'insurable interest' in the car they are insuring. Insurable interest means that the policyholder has a reason to insure the car. If you are the owner, the reason is self-evident: the car is your investment, so you have a stake in keeping it from being damaged or destroyed.

However, there are some exceptions where someone can get a policy for a car they do not own. For example, if you live with the car owner, you can be added to their insurance policy as a named insured.

Another option is to take out a non-owner insurance policy. This is a type of car insurance that may be suitable if you don't own a vehicle and don't live with someone who owns a vehicle, but you borrow cars frequently or drive other people's cars from time to time. Non-owner insurance provides liability coverage for bodily injury and property damage, meaning that it will cover you if you are liable for damages or injuries in an accident. It does not cover damage to the vehicle you are driving or your own injuries after an accident. Non-owner insurance policies tend to be less expensive than standard car insurance policies.

State laws

If you don't own the car but live with the owner, you can ask to be added to their insurance policy. If you borrow a car from someone you don't live with, you may be covered under their insurance policy, but it's best to check with the owner and their insurance provider.

If you don't own a car but frequently borrow or rent cars, you may want to consider purchasing a non-owner auto insurance policy. This type of policy provides liability coverage for injuries or property damage you may cause while driving someone else's car. However, it won't cover damage to the car you're driving if you're at fault for the accident.

Adding the owner as an additional interest

This is often done when the owner of the vehicle is a lender, such as a bank or leasing company, and wants to be kept up to date on how the vehicle is insured and protected. For example, if you are financing your car, the lienholder could be listed as an additional interest.

Adding an additional interest to your insurance policy will not impact your rate. However, it is important to note that this does not provide coverage for the additional interest, and they cannot file claims. Instead, they can request that certain coverage types, such as full coverage, be purchased.

In the case of car insurance, an additional interest is a person or entity with a financial claim to your car. This could be the lender for an auto loan, or a relative who is a co-owner of the vehicle but not a household member.

It is important to distinguish between an additional interest and an additional insured. While an additional interest is notified of the policy status, an additional insured receives coverage under the policy and can file claims.

Frequently asked questions