Auto Insurance: Who's Covered And Who's Not?

If you're not the named insured on an auto insurance policy, it typically means that you're an additional driver on the policy. This usually applies if you reside with the named insured and/or regularly use their vehicle. As an additional driver, your record will be used to determine insurance rates, but you won't be responsible for premiums or making changes to the policy. Your coverage will also be limited to the vehicle you're listed under.

Co-titling a vehicle

To add someone's name to a vehicle title, you will need to provide the following documents:

• The vehicle title signed off by all current owners as the seller and new owners as buyers (at least one owner must remain the same).
• If the vehicle is being financed, contact your lien holder to initiate the change in ownership request.
• If more than one owner remains, complete form DR 2395: Joint Tenancy with Rights of Survivorship. Each remaining owner must sign their acknowledgement on this form.
• A fee is typically required for the new title, which may vary depending on the county.

It is important to note that the requirements and procedures for co-titling a vehicle may vary depending on the state and county. Therefore, it is always recommended to check with the local motor vehicle office or department of motor vehicles for specific instructions and requirements.

Adding a named insured to an auto policy

A named insured is typically the owner and payer of the policy and has full protection as outlined in the policy. They are responsible for maintaining the policy, making changes, verifying claim details, and paying premiums. In most cases, the named insured is the individual who owns or leases the vehicle being insured. Policies can have more than one named insured, such as a spouse or co-owner of the vehicle.

An additional insured, on the other hand, is someone who has partial ownership of the vehicle or is liable for it, even if they are not the primary driver. They are often co-owners, leaseholders, or drivers of vehicles owned by someone else. Additional insured parties are usually not responsible for paying premiums but are included in claim payouts and notified of any changes to the policy.

A listed driver, meanwhile, is simply someone who is authorised to drive the vehicle but does not have the same rights as a named insured or additional insured. They are covered by the insurance policy only when driving the vehicle and are not eligible for compensation in the same way as a named insured or additional insured.

To add a named insured to an auto policy, you will need to contact your insurance provider and provide them with the necessary information about the additional person. This may include their name, address, driver's license details, and driving history. The insurance company will then be able to add them to the policy, and they will have the same rights and responsibilities as the original named insured. It's important to note that adding a named insured may result in additional fees or changes to your premium, so be sure to clarify this with your insurance provider.

Additionally, it's worth noting that the process of removing a named insured can be more complicated, especially if it involves a spouse or someone with partial ownership of the vehicle. In some cases, explicit permission or a signed form may be required, and a new policy may need to be put in place before removal.

Non-owner insurance

In addition to the above, non-owner insurance may also include medical payments and/or personal injury protection coverage, as well as uninsured or underinsured motorist insurance coverage.

Proving insurable interest

Insurable interest is a requirement for issuing an insurance policy. It is the basis of all insurance policies, linking the insured and the owner of the policy. Insurable interest is a type of investment that protects against financial loss. It exists when the damage or loss of an object would cause financial loss or hardship.

In the context of auto insurance, insurable interest is the motivation someone might have to get insurance for a vehicle and keep it in good condition. Being the owner of the vehicle is the most straightforward way to prove insurable interest, as the motivation is that the car was an investment for the owner.

If you are not the owner of the vehicle, it can be more challenging to prove insurable interest. Insurance companies are typically wary in such cases, as fraud is common. Here are some ways to prove insurable interest for auto insurance when you are not the owner:

• Co-title the vehicle: You can add your name as a partial owner to the car's title. This usually involves a joint application for a new title, paying a fee, and signing the title in person at the DMV.
• Add the owner to your policy: If you live with the owner of the vehicle and frequently drive it, you can add them as a named insured to your auto policy.
• Non-owner insurance: You can look into non-owner insurance, which will cover you for liability while driving a car that isn't yours. However, this type of insurance has limited coverage and does not include protection for the vehicle itself.

It is important to note that state laws vary, and some states may prevent insuring a vehicle that is not in your name. Additionally, insurance companies may deny insurance to someone whose name does not appear on the vehicle registration.

State laws

If caught driving without insurance, one may face penalties, including fines, driver's license suspension, vehicle impoundment, and even jail time, depending on the state and the number of offenses. For example, in California, the first offense can result in a $100 to $200 fine, while a repeat offense can lead to a $200 to $500 fine.

To ensure compliance with state laws, it is essential to review the specific requirements and regulations in your state regarding car insurance and permissive use.

Frequently asked questions