Insuring Two Names: Auto Policy Essentials

There are several reasons why you may want to insure two names on an auto policy. For example, you might co-own a car with another person, or you might want to add your child to your insurance policy. While it is allowed in most states, some insurers might not underwrite a policy to a name different than that of the registered vehicle owner. It's also worth noting that having a car insured and registered under different names may complicate the claims process.

The benefits of having two names on an auto policy

Shared Rights and Responsibilities

Having two names on an auto policy grants equal rights and duties over the car to both owners. This allows for flexible usage arrangements. For instance, both owners can freely drive the car without needing permission from the other party.

Smooth Ownership Transfer

If one owner passes away, joint ownership ensures the vehicle immediately transfers to the surviving owner. This avoids lengthy probate disputes and makes the transfer of ownership simplified and hassle-free.

Estate Planning Advantages

Listing a spouse or family member as a joint owner makes transferring ownership to them straightforward if you become incapacitated or die.

Better Insurance Options

Insurance companies often offer multiple vehicle owners better rates, special offers, and discounts. So, if you have two names on an auto policy, you can take advantage of these deals better. You will likely also have greater flexibility to individualize your insurance coverage.

Shared Maintenance Responsibility and Liability

Maintaining a vehicle can be a burden. This burden is shared if you have two names on an auto policy. Instead of one person being responsible for all the upkeep and maintenance costs, both joint owners will need to look after the car – including routine servicing and repair costs.

Both Parties are Responsible for Funding

If two names are on an auto policy, both people will be responsible for the funding and paying monthly loan installments. With the burden shared, the pressure is reduced.

How to add a second name to an existing auto policy

To add a second name to an existing auto policy, you'll need to contact your insurance provider or agency and inform them that you want to add another person to your existing auto policy.

Most major insurance companies allow you to make changes to your policy online or over the phone. Here are the steps you can take:

• Contact your insurance provider: Reach out to your insurance company or agency and inform them that you want to add another person to your existing auto policy.
• Provide basic information: Have some basic information about the person you want to add to your policy ready, including their full name, date of birth, marital status, Social Security number, and driver's license number. You may also need to provide details about their driving record, such as any recent accidents or traffic violations.
• Determine coverage: Decide on the coverage you want for the additional person. You may need to meet the state's minimum insurance requirements and have the same liability coverage for all drivers on the policy.
• Review policy changes: Before finalizing the changes, understand how adding the new person will affect your rates and coverage amounts.
• Process the change: Provide all the necessary details and review the policy endorsement. Depending on the insurance company, you may need to wait up to 24 hours to receive your updated policy documents.
• Inform your insurer: Once the changes have been processed, update your insurance company with the new person's information. This may include adding them as a driver to your car's insurance policy and providing a copy of the updated policy for their records.

Keep in mind that adding a second person to your auto policy may result in changes to your insurance rates, especially if the added person is an inexperienced or teenage driver.

The difference between a named insured and an additional driver

When it comes to auto insurance, there are a few key differences between being a named insured and an additional driver.

A named insured is the person who opened the policy and whose name appears on the policy declarations page. They are responsible for paying premiums, filing claims, and making changes to the policy, such as adjusting coverage or adding authorised drivers. The named insured is also presumed to be the primary driver of the vehicle and their driving record, credit history, etc., are taken into account when calculating premiums. In the case of joint ownership, there can be multiple named insureds on a policy, such as spouses or partners, who share equal rights and responsibilities.

An additional driver, on the other hand, is someone who is added to the policy and has permission to drive the covered vehicle but does not have the same rights as the named insured. They are typically a person who resides with the named insured and/or regularly uses a shared vehicle. While their record is used to determine rates, they are not responsible for paying premiums and cannot make changes to the policy. They are also only covered when driving the vehicle they are listed under.

It's important to note that adding an additional driver to a policy may result in increased premiums due to the additional risk they represent. Furthermore, the actions of an additional driver, such as accidents or speeding tickets, can also affect the cost of coverage for the named insured.

In summary, the key distinction between a named insured and an additional driver lies in their level of responsibility, rights, and coverage under the insurance policy. The named insured has more control over the policy and is fully covered, while the additional driver has limited rights and is only covered when driving the specified vehicle.

How to insure a car that is not in your name

Insuring a car that is not in your name is possible but may be complex and depends on your insurance provider and its underwriting guidelines. Generally, insurance companies require the policyholder to have an insurable interest in the vehicle, meaning you must have a vested financial interest in its protection. This typically applies to situations where you regularly use the car, such as when it belongs to a family member or is leased.

Co-Title the Vehicle

Co-titling a vehicle means adding an additional owner to the car. Each state's Department of Motor Vehicles (DMV) or equivalent department has specific requirements for doing this, but it usually involves jointly applying for a new title, filling out a form with the names and information of both drivers, paying a fee, and going to the DMV in person to sign the new title. If the car was purchased with a loan that hasn't been fully paid off, you'll need to notify the lienholder and see if adding an additional owner to the title is possible. Once you're added as a co-owner, you can get an insurance policy on the vehicle as your co-ownership ensures insurable interest. However, keep in mind that insurance premiums will likely increase when you add another person to the policy.

Add the Owner to Your Insurance Policy

If you're looking for an easier way to insure a car that's not in your name, you can add the owner of the vehicle to your insurance policy as an additional interest. This option won't increase your premiums as it merely states someone else's insurable interest. Remember that any claims check resulting from damage to the vehicle will go to the owner or the bank if the car is not fully paid off.

Non-Owner Insurance Policy

If you don't own a car but frequently drive someone else's vehicle, you can consider a non-owner insurance policy. This type of policy provides liability coverage when driving a vehicle you don't own, protecting you against damages in case of an accident. Non-owner insurance acts as secondary coverage to the car owner's primary policy and typically only includes liability coverage, which pays for damages to third parties. While this option may not provide as much coverage as a traditional insurance policy, it's a good choice if you want to ensure you have some level of protection when driving a car that's not yours.

Ask to Be Added to the Current Policy

If the car owner's insurance provider allows it, you can ask them to add you to their existing insurance policy as a driver. This process is usually straightforward if you live with the owner. Keep in mind that some insurance companies may require you to be added as a named insured on the policy if you frequently drive the vehicle.

Ask to Be Added to the Car Title

Another option is to add your name to the car title as a partial owner. However, keep in mind that this might not be possible if there is still a loan on the vehicle.

Transfer the Title to Yourself

If you decide to buy the car, you can transfer the title to yourself and then purchase an insurance policy in your name.

It's important to note that insuring a car that is not in your name can be challenging, and you may encounter difficulties proving insurable interest and filing claims. Additionally, some states have specific requirements, such as New York, which requires the insurance card and registration to be in the same name. Always communicate openly with insurance providers and consider discussing your specific situation with an insurance agent to ensure you comply with all requirements and have the appropriate coverage.

The consequences of not having matching names on the registration and insurance

• Confusing the insurer and affecting the payment of settlements to insured drivers.
• Complicating the claims process, as the insurance company may pay the claim to the registered owner rather than the insured driver.
• Delaying or even withholding the settlement payment if the insurance adjuster finds that the car owner differs from the covered driver on the policy.
• The insurance company may refuse to pay your claim if they suspect you used a different name to avoid a high insurance premium.
• The insurance carrier may report you for insurance fraud if they suspect foul play.

While most states don't require the names to match, some insurance companies might refuse to provide insurance for a vehicle without putting the registered owner on the policy.

Frequently asked questions