Can you insure a car you don’t own? The short answer is yes, but not without difficulty.

In theory, it should be easy, as you simply tell the insurance company that you’re not the owner when you apply. In practice, however, the process can be a little frustrating.

The problem is that most car insurance companies are generally reluctant to insure someone who isn’t the owner of the car. This is due to something called insurable interest, which forms the basis of all insurance contracts. Continue reading to find out what it takes to insure a car that you don’t own.

Insurable Interest Explained

The basic assumption behind insurable interest is that if you obtain car insurance for your own vehicle, you have a vested interest in its well-being. The majority of car owners wouldn’t want to damage their vehicle because of the repair costs and the risk of losing a substantial investment. Furthermore, insurers only want to insure drivers who have obvious reasons for using and caring for a vehicle.

But for an insurance company, all this intrinsic motivation to keep your car accident-free is gone when you’re not the owner. In their eyes, the car simply isn’t important to you. After all, it won’t matter if you total a car that you don’t own.

How to Insure a Car You Don’t Own

In order to obtain insurance for a car you don’t own, you’ll need to convince insurance companies of your involvement in the car’s ownership. It is up to you to demonstrate that you are just as invested in the car as the owner is.

Here are some ways to acquire insurance for a car you don’t own:

• Add the owner to your policy as an additional interest
• Get added to the owner’s policy
• Get a non-owners insurance policy
• Add your name to the car’s registration

The effectiveness of each method varies depending on your situation. We’ll review all the available options, so that you can choose the one that best fits your needs.

Include the Owner in Your Policy as an Additional Interest

If you already have an existing insurance policy in your name, simply add the owner of the vehicle as an additional interest. Vehicle owners added as additional interests still retain ownership of their vehicles, even if they are not the primary drivers.

As opposed to adding another covered driver, this will not affect your insurance rates. It merely indicates that another party has an insurable interest. We recommend this option if the vehicle is in your possession more than the owner’s and you need regular access to it.

Just remember that, in order for the owner to drive the vehicle, they will still need to obtain their own insurance as they are not covered by your policy.

Add Yourself to the Owner’s Policy

Additionally, you can add yourself as a named driver to the original owner’s insurance policy. You’ll be able to do this easily if you live in the same house as the owner. However, expect increased insurance rates, though it is still generally more affordable than having separate policies for each driver.

If you do not live with the owner, your insurer may be less willing to give you some wiggle room in regard to adding names to the policy. In this situation, as mentioned above, you will need to prove that you have a financial interest in the car.

For example, you might say that you need to use a vehicle to commute to work but cannot afford your own car. This is a perfectly valid reason.

Just remember to be honest. Getting caught lying to your insurance provider can lead to rate increases, policy rejections, and fines.

Get a Non-Owner Insurance Policy

Some companies offer special insurance policies that allow you to insure a car that’s not yours. We call these non-owner policies. 

Non-owner car insurance is for people who don’t own a car but occasionally drive someone else’s. This type of insurance provides liability coverage for you, but the vehicle itself still has to be insured by the owner.

Non-owner insurance is best if you regularly borrow cars from family or friends. It’s also a suitable option if you regularly rent cars or use car-sharing services. This type of coverage is designed to complement the owner’s existing policy rather than replace it, so it can be purchased whenever needed.

Rates for non-owner auto insurance tend to be between 5% and 15% lower than standard policies. However, if you drive a borrowed or rented car only a few times a month, the savings may not be noticeable. On the other hand, if you will be driving the car often, it makes sense to add yourself to the owner’s policy instead (see the previous method).

Most of the major car insurance companies offer non-owner car insurance, so if you want to insure a car you don’t own with State Farm, Geico, or Allstate, for instance, you have the option. Progressive will also insure a car that is not in your name if you buy non-owner car insurance.

Add Your Name to the Car’s Registration

A co-owner agreement is another simple way to prove that you have an insurable interest in a car that you don’t own by directly sharing ownership of it. To register yourself as a co-owner of a vehicle, speak to the owner about obtaining a new registration. Otherwise, if the car is intended as a gift, have the owner directly transfer the registration to you.

Both of these processes must be done at your state’s Department of Motor Vehicles (DMV) and will require a new registration for the vehicle.

In any case, once your name appears on the title of the car, acquiring insurance for that vehicle won’t be difficult. However, keep in mind that you’re technically insuring your own vehicle at this point.

Regardless, in the event that you decide to pursue this route, here are a few other situations to consider:

• It can be challenging to obtain co-ownership of a vehicle in certain circumstances, such as when the vehicle has yet to be fully paid off
• You can acquire a co-owner even if you don’t live together
• State regulations may vary regarding transferring or altering registrations

Are there any legal restrictions?

New York is the only state in the U.S. that requires that the name on the insurance card match the name on the vehicle’s registration. 

This indicates that a driver in New York cannot obtain insurance for a car they do not own. The state does, however, allow co-ownership. So, as long as you are listed as a co-owner on the vehicle’s registration, you can still go ahead and purchase coverage for your vehicle.

You can insure a car you don’t own in Texas, Florida, and all other states in the ways stipulated above.

Paying income taxes and car insurance premiums can add up over time. Most people would like to save money wherever they can, so a common question is: “Is car insurance tax-deductible?”

A tax deduction is an expense that you subtract from your reported income, lowering your tax liability. As a result, you get a larger refund or owe less in taxes that year. The IRS has specific rules and processes for counting deductions and calculating tax liability.

Car insurance is only tax-deductible for business activities. If you’re eligible to deduct your auto insurance cost, you must keep detailed records and report your deduction on your tax form, whether you’re a business owner or an employee.

Our helpful guide explains the situations when car insurance is tax deductible, how to deduct your insurance premiums, and how to calculate what percentage of your premium qualifies.

When Car Insurance Premiums Are Tax-Deductible

Auto insurance is tax-deductible when business owners and certain employees use their vehicles for business purposes. Suppose you’re a business owner who uses a car only for business. In that case, you can deduct the actual cost of your insurance rates, fuel, maintenance, and other vehicle-related expenses, or you can choose a per-mile rate, which the IRS calls “standard mileage.”

If you are an employee, you can deduct some of your personal vehicle expenses if you are an Armed
Forces reservist, qualified performing artist, fee-basis state or local government official, or employee with impairment-related work expenses. Although you are never allowed to deduct the cost of commuting to and from your regular place of business, you can write off what you spend on qualified work-related expenses as long as your employer does not already reimburse you. If you do not meet the employee category requirement, check with your employer to see if they will reimburse you at a companywide per-mile rate.

As a sole proprietor, the place to account for your actual expenses or standard mileage deduction is on Schedule C, Profit or Loss From Business. If you’re a qualified employee claiming either deduction, you report it on Form 2106, Employee Business Expense. Neither sole proprietors nor qualified employees have to itemize deductions on their tax returns to claim these write-offs.

If Your Car Is for Personal and Business Use

If you’re a sole proprietor, you can deduct car insurance on your taxes even if you only use your vehicle for business use some of the time. You can use the actual expenses or standard mileage calculation based on the percentage of driving you do for business purposes.

For example, if you drive eight hours every day and six of those are for a grocery delivery company, 75% of your driving is business-related, and 25% is personal. If you consistently do 75% of your driving for business, you can write off 75% of your insurance rates.

If you decide to go with the standard mileage deduction, remember that it changes yearly. The IRS publishes standard mileage rates for every tax year, so be sure to calculate your deduction based on the correct year’s rates.

Write Off Your Car Insurance Deductible

If your vehicle is damaged or destroyed, you may also be able to write off your insurance deductible and the replacement or repair cost above and beyond what your insurance company pays out. However, unless the vehicle is used only for business purposes, it will most likely count as a personal loss, which you cannot deduct unless it’s part of a federally mandated disaster, such as a hurricane or wildfire.

Keep Detailed Records for Your Tax Filing

Even though you can claim car insurance on your taxes without breaking the law, be sure you’ve kept good records so you can write off car insurance as a business expense. If you get audited, you’ll have to show how you got the numbers you reported on your tax form.

You also need to review your records when deciding whether to itemize or take the standard deduction. If you’re a qualified employee, you don’t need to itemize all your deductions to file Form 2106. When you’re deciding between actual expenses or standard mileage, though, it pays to calculate both and choose the one that benefits you more.

Consult a tax professional if you need help figuring out what counts as a write-off and how to calculate your deductions. As you move from personal to self-employed taxes, things get complicated quickly. Although you may be able to manage on your own, there’s no shame in asking for help when you need it. A qualified tax professional can also help you keep up with ever-changing tax laws and back you up if you ever get audited.

Remember: Your Car Insurance May Be Tax-Deductible 

If your state requires you to carry expensive insurance, for example, as a ride-share driver, you don’t want to miss out on writing off that expense. Even if you’re allowed to use your personal insurance as a business owner, it’s still a significant expense every year, and it would be a shame to skip the deduction.

To keep your insurance costs as low as possible, always keep car safety in mind and try to qualify for an accident-free discount. You could also ask your insurance agent to review your policy in case you are eligible for any other discounts.

Do you need a driver’s license to buy a car? Legally there are no barriers to purchasing an automobile, even if you are unlicensed, provided you are able to either pay cash or qualify for financing. There are also a number of legitimate reasons why a person may wish to buy a car, even if they cannot legally operate it. 

However, a vehicle buyer without a license to drive can face other obstacles, such as securing a loan and obtaining enough insurance for your car. These problems are not insurmountable, and largely depend on why you are making the purchase and what you plan to do with the vehicle. Here is a guide for unlicensed individuals wishing to buy a car.

Buying a Car Without a Driver’s License

Any competent individual of legal age who is able to afford the purchase price and can find a willing seller can buy an automobile, regardless of whether or not they actually have a license to operate it. However, depending on the reason for the purchase, you will be limited as to what you can do with it as an unlicensed person. 

Obviously, you will not be able to operate the vehicle on public streets and roads without risking a ticket for driving without a license. Furthermore, you may face additional obstacles, such as securing financing if you are unable to pay cash or even getting insurance coverage. You may also run up against a serious problem when you attempt to register your car with your state’s department of motor vehicles.

Before going into the difficulties of making a car purchase when you don’t have a license, let’s look at some individual situations why a person who is not licensed to drive would buy an automobile.

• As a gift. Buying a car as a present for graduation, a wedding or other special occasion is not uncommon, and it does not require the buyer to be licensed to drive it. The recipient of the gift must be licensed, however, and the vehicle registered in their name.
• For a chauffeur.  You are essentially buying a tool for an employee so that they can perform the task of driving you around. This may be an actual chauffeur or a full- or part-time caregiver. All that matters is that they are licensed and insurable.
• For a business. As a business owner, you can buy as many cars, trucks, or other necessary vehicles as you need for your employees, regardless of whether or not you have a driver’s license. Vehicles used for a business much be covered by a commercial fleet insurance policy. 
• Collector cars. People who collect antique, vintage, and classic automobiles do not need a driver’s license to purchase them. Typically, insurers place tight restrictions on when and where collector cars can be driven.

Where can I buy a car without a license?

Any dealership or private individual can sell you a car, regardless of whether or not you have a license to drive it.  If you have cash in hand, buying a car without a license is a fairly straightforward transaction. You will need to have a valid, government-issued form of identification, but this does not necessarily need to be a driver’s license. A military ID or even a passport will do; many states also offer their own identification cards.

Barriers To Buying a Car Without a License

If you do not have a license to drive, finding someone willing to sell you a vehicle can be the least of your problems, especially if you need a car loan in order to make the purchase. There are other obstacles as well that involve insurance coverage and road taxes.

Getting Car Insurance

Obtaining car insurance without a license for their purchase is a major obstacle to unlicensed car buyers. It can be done, but keep in mind that an insurer requires a driver’s license in order to access a potential customer’s driving history. This said, there are a few insurance companies that will write policies for unlicensed car owners under special circumstances.

What is required is licensing information and a driving record for the person who will be the primary operator. Even if you are paying for the coverage, rates will be based on information regarding the person who actually drives the vehicle. As long as the car is in your name, you will be listed on the policy as an “excluded” driver or “non-driver” to whom coverage does not apply.

Registering Your Car

Every state and province requires that a vehicle be registered and taxed before it is driven on public roads and highways. Unfortunately, the law requires that anyone registering a vehicle in their own name have a valid driver’s license. The only way around this is to list the actual driver on the registration. This would make you at best a co-owner.

Getting Financing

Can you finance a car without a license? It’s not impossible, but finding a lender can be very challenging.  First of all, applying for a car loan requires a valid form of photo identification. Any form of state or federal government-issued identification can fulfill this requirement. However, there is a  catch, which is that most lenders will not approve car financing unless the buyer has a valid license to operate the vehicle. The reason is that lenders require that the buyer have car insurance, which an unlicensed driver does not have.

Even car dealerships that have their own in-house financing will offer a loan to someone with bad credit before someone without a driver’s license. This is because of the aforementioned registration laws and the fact that there will be a co-owner on the title. You could apply for financing from a third party, but again, that insurance requirement can present a serious barrier to car ownership.

Buying a Car Without a License: The Bottom Line

There are a number of legitimate reasons why a person without a license to drive would purchase a car. Just be aware that the system as it exists is designed to serve licensed drivers. Understand that without a license to operate the vehicle, you will be facing numerous obstacles.

Shopping for auto insurance is a hassle, especially if you are determined to get the best coverage at the most affordable rates. While it makes the most financial sense to shop around until you find that coverage, the process can be complex, confusing, and time-consuming. Fortunately, car insurance brokers exist.

Insurance brokers bring a level of expertise to the search process that many everyday citizens do not have. A broker can seamlessly guide you through the shopping process and present you with the coverage options that best fit your needs and budget.

In most cases, you have to pay insurance brokers. Many charge a flat rate, while some receive a commission from the companies for which they sell. The commission is typically a percentage of the price of the policy. Regardless of the cost, using a broker’s services can help you save money in the long run.

What is a car insurance broker and what do they do?

A car insurance broker helps individuals find the best policy for their needs and budget. They essentially take over the shopping and comparison processes for you and present you with options that offer the best combination of coverage and affordability.

Most brokers sell policies from several insurance companies so as not to pigeonhole customers into one or a handful of coverage packages. They differ from agents who have ongoing relationships with certain companies. These brokers, otherwise known as “captive insurance agents,” sell policies from one company and work for that company.

All car insurance brokers must meet the licensure requirements for the state or states in which they sell policies. The companies they partner with must enforce these requirements and ensure their brokers meet all other qualifying criteria to protect consumers’ interests.

Car Insurance Broker vs. Insurance Agent

Brokers differ from insurance agents in three distinct ways. The first is that they do not work exclusively for car insurance companies. Rather, brokers work on behalf of people like you to find the best insurance policies from the best auto insurance companies in the industry.

The second distinction is that agents can complete insurance sales — or “bind coverage” — whereas brokers cannot. Many brokers do not have the agency to sell policies. Instead, they must work with insurance agents, who are employees of insurance companies, to finalize sales. Some brokers, however, do have the qualifications and authority to complete sales.

Finally, agents receive appointments from one or more companies. This means they enter into contracts with insurance companies that outline which products they have the authority to sell and at what rates.

On the other hand, brokers merely solicit quotes from the best car insurance companies. The best brokers can obtain cheap monthly rates by identifying and negotiating for discounts as well. When consumers are ready to purchase a policy, the broker works with the insurance company or an agent to obtain a binder.

Car Insurance Quotes With the Help of an Independent Broker

There are several advantages of using a broker rather than shopping for and comparing policies on your own. Below are a few ways a broker can help streamline the process for you.

They Shop on Your Behalf

Perhaps one of the best reasons to use a car insurance broker is that they can do the work on your behalf. Once you give your broker a solid idea of your needs and budget, they can take over the shopping and comparison processes and narrow down the options.

They Possess Knowledge You May Not Have

Insurance is confusing, with many policies full of complex jargon and dense legal language. Brokers are intimately familiar with the ins and outs of the industry and policy lingo. They can help you cut through the jargon and truly understand what you are paying for.

They Help You Access a Broader Market

Though many insurers have switched to systems that allow for online quotes, several still require interested parties to contact agents via phone. Gathering quotes over the phone can be extremely time-consuming, especially when many agents try to sell to you over the phone while they have you. This deters many individuals from seeking phone quotes and, therefore, narrows their market.

When you pay a professional to shop for quotes for you, time becomes a non-issue. The brokers contact car insurance companies on your behalf to ensure you get the best coverage at the lowest rates from the widest market possible.

They Save You Time

Whether you look for quotes online or via phone, shopping for quotes and comparing them can be time-consuming. When an insurance broker takes over the task for you, you get your time back.

They Can Identify the Best Coverage

Most vehicle owners are unaware of how much and what type of coverage they actually need. Moreover, many vehicle owners are not familiar with state laws, which makes shopping for coverage all the more difficult. Car insurance brokers, on the other hand, can assess your situation and find coverage that not only meets your needs but also fits your budget. If you have concerns about a policy, or if you are hesitant to choose a pricier policy, your broker can help you assess the risks of each option and ensure you are confident in your purchase decision.

They Can Help Adjust Your Coverage as Your Needs Change

Finally, a broker’s job does not end once you purchase a policy. The best professionals stick with you over the years and identify ways you can adjust your policy to align with your current lifestyle.

What are the cons of using an insurance broker?

Working with a car insurance broker does come with a few pitfalls, as follows.

You Must Pay for Their Services

Brokers charge a fee for their services, either upfront or via a commission. Either way, you may end up paying more than you save. If you pay an upfront fee, chances are you could have found a similar rate on your own. If you pay commission, there is no guaranteeing that the broker won’t point you toward the most expensive policy for their own financial gain. If you choose to hire a broker, make sure you have a clear understanding of their fees and incentives ahead of time.

You May Just as Easily Shop for Yourself

If your needs are simple — such as if you are single, have a clean driving record, and maintain a stellar credit score — you may be able to score the best rates on your own. However, if you have unique driving concerns, such as a commercial driver’s license or horse trailers, it would make more sense to use a broker’s services.

With the availability of online quotes and car insurance guides, it is easier than ever to shop for policies on your own from the best car insurance companies across the nation. Many people can do the job of a broker in mere minutes without ever having to pay a fee, thanks to online quote services.

How To Select a Great Car Insurance Provider by Working With a Quality Broker

A broker has a duty to operate with your best interests in mind. However, that does not mean you should remain completely passive throughout the entire process. When your broker presents you with policy options, you can minimize your risk by doing the following:

• Compare several policies
• Choose a policy that is easy to read and understand and avoids complex jargon
• Go through each section of each policy to compare how different companies handle different scenarios
• Keep an eye out for “arbitration,” “alternative dispute resolution,” and “legal action against the insurer”
• Familiarize yourself with the customer’s obligations of each policy

Finally, check reviews to learn what a website or broker may omit about an insurer.

The Different Types of Car Insurance Coverage You Can Get With a Good Broker

The best car insurance brokers strive to secure a policy that includes minimum coverage and add-ons for little to no extra cost. Examples of add-ons that you may never have considered on your own include road debris coverage, windshield replacement, collision coverage, and GAP insurance.

Working With a Car Insurance Broker

Working with a car insurance broker has its benefits, especially if you do your homework. However, you can also do a lot yourself without having to pay a fee by using an online car insurance comparison service. 

A car insurance policy is a legal contract between a driver and an insurance company. The driver pays the insurance company a premium, and, in exchange, the insurer agrees to pay for any damages the driver causes. The insurance company bases its rates on how risky it perceives the driver to be, based on age, experience, driving history, and other factors.

Car insurance rates can add up quickly. A voice in the back of your mind may be asking: “Why do you need car insurance? Wouldn’t it be cheaper to skip it?” In addition to being required in 48 states, having the right coverage can help protect you and others from expensive bills if you’re in an accident.

This article will explain why you need insurance and explore the hidden costs of going without it. We’ll walk you through different types of car insurance policies so that you feel better equipped to make a decision about what coverage you need.

How does car insurance protect you?

If you cause an accident, you are liable for paying for damages for the other vehicle, personal property, and medical bills of everyone affected. You also have to pay for repairs to your car and your own medical bills. When you have the right auto insurance policy, you pay rates and deductibles, but these usually add up to much less than paying for all the damages out of your pocket. You have several options when choosing a car insurance package.

Liability

States that require drivers to carry car insurance (all states except Virginia and New Hampshire) require liability coverage at a minimum. This type of policy pays for damage and injuries that you’re liable for. This protects other people when you are at fault, but it also saves you from paying all expenses out of pocket. Each state that requires liability coverage has a minimum requirement, so it’s important to know whether you have enough accident coverage. For more protection, you can increase the amount of coverage on your policy.

Comprehensive

Comprehensive coverage is an optional add-on covering damage unrelated to a collision. For example, this is the policy that covers hail damage and theft. If you are paying a car loan, your lender will likely require comprehensive coverage.

Personal Injury Protection

Personal injury protection coverage (often referred to as PIP or no-fault coverage) may pay for things like medical or funeral expenses for yourself and your passengers, as well as lost wages due to an injury. Some states require PIP, and some don’t, but it’s worth looking into even if it’s not needed.

Collision

The requirement for collision insurance, like comprehensive, depends on your state but may be needed by a lender. It’s also likely that you’ll need to carry collision coverage if you lease a vehicle. It kicks in to pay for repairs to your car when you get into an accident, no matter who is at fault. It also covers you if you run into a tree or another stationary object.

Full Coverage

You may hear people talking about full coverage auto insurance when they mean comprehensive. Full coverage refers to comprehensive, collision, and liability combined.

GAP

If you total a car that you still owe money on, the insurance payment you get (based on the vehicle’s cash value) may not be enough to pay off the loan. In this case, GAP coverage will help cover that difference.

Non-Owner

You may be wondering if insurance is necessary for car drivers who don’t own a car. Non-owner insurance goes with the driver, not the vehicle. If you’re renting a car and don’t already have insurance, you can buy short-term coverage from the rental company. However, if you rent cars more than once a year, it may be worth getting year-round non-owner coverage. If you borrow friends’ cars with their permission, you’re covered under their policies, but non-owner insurance can pick up where their policy limits end if you get into an accident.

Medical Payments

Medical payments coverage is required in a few states and optional in most. It can help cover medical expenses after an accident, similar to personal injury protection.

Underinsured and Uninsured Motorist

Around half the states in the U.S. require uninsured motorist coverage. This policy covers both your car repairs and your medical bills if another driver caused an accident but had no insurance or not enough to pay for the actual costs of your medical care and car repairs.

The types of coverage that are right for you depend on what car you drive, whether you own or lease it, and more. For example, if you drive an older vehicle that wouldn’t be worth repairing, you may not want to pay for comprehensive coverage. On the other hand, if you still owe money on your car and it’s a popular model among car thieves, you might want to opt into comprehensive.

What is the cost of not having insurance?

Even if liability insurance is not required where you live, skipping it does not guarantee that you will save money. If you cause an accident while driving without insurance, you will be responsible for potentially thousands or tens of thousands of dollars in medical and vehicle repair bills for the people in your car and the people in the other vehicle. If you cause property damage, you will also be liable for the cost of repairs to that property. There is a high likelihood that these bills will far outweigh the cost of auto insurance rates and deductibles.

What are some other risks of not having car insurance?

In states that require car insurance coverage, you have to think about the penalties for not carrying it, in addition to the costs described above.

Blockquote

A typical penalty in most states is a fine of around $500, a revoked driver’s license, and canceled vehicle registration.

Some states also impose jail time, especially for repeat offenders. You could also have your vehicle impounded. Even if you don’t end up in jail, you will pay high fees to get your license and registration reinstated and your car out of impound.

Why do you need car insurance?

Why is car insurance mandatory? If you drive a car, having vehicle insurance protects you from paying for damages from your own money. Depending on the type of coverage you choose, it can also help you get your car repaired so you can get back to driving as soon as possible after an accident, theft, or hail damage. When it comes to auto accident preparedness, it’s best to make sure you are covered, no matter what happens.

GAP insurance is a type of car insurance coverage that’s essential if you want to ensure you’re fully covered in case your car is totaled before you pay off your lease or loan. That said, there are situations where GAP insurance starts to cost more than it’s worth. If this happens you’ll want to know how to cancel GAP insurance as painlessly as possible. Depending on your particular situation, you may even be able to get some or all of the money you paid for GAP coverage back.

With this guide, we’ll show you how to cancel GAP insurance, take a look at some situations where you may be able to obtain a refund, and answer a few other common questions related to canceling GAP insurance. Since how GAP insurance payments work depends on if you purchase it through an insurance company or dealership, we’ll do our best to discuss both options.

How do you cancel GAP insurance?

GAP insurance is supplemental coverage (normally purchased alongside collision and comprehensive coverage) that’s intended to protect you financially in the event that your car is totaled while you’re still making lease or loan payments. In the event of an accident that totals your car, car insurance companies will usually pay out only the actual cash value of your vehicle. And since a new vehicle’s value drops by about 20% in the first year alone, there can be a significant difference between what you have left on a loan or lease and how much your car was actually worth. Without GAP insurance, you could end up owing money on a car that you can’t drive.

According to the Insurance Information Institute, GAP insurance coverage from an insurance company is usually cheaper than GAP coverage from a dealership. Adding GAP insurance to an existing premium costs about $20 per year.

Although it’s great to have while you’re starting to pay off a loan or lease, there are a few reasons why you might want to cancel GAP insurance:

• The amount remaining on your car loan is nearing the actual value of your vehicle
• You recently purchased a car you were previously leasing
• You want GAP insurance from an insurance company instead of a dealership (GAP insurance from a dealership tends to cost more overall)

Canceling GAP insurance is a common practice that’s usually straightforward. If you’re canceling GAP insurance from an insurance company, simply contact your insurance company and let them know you’d like to cancel your GAP insurance coverage. Depending on your insurance company, you may also be able to cancel or adjust your GAP insurance policy through a website or app.

Can you cancel GAP insurance from a dealership?

Yes, you can cancel GAP insurance from a dealership, but the process may be more complicated than canceling through an insurance company. Generally, you can call your dealership and ask to cancel GAP insurance. After that, they may have you provide written notice that shows you want to cancel. You may also have to communicate directly with the insurance company that your dealership uses to add GAP coverage to your loan or lease agreement.

If you’re planning to switch your GAP coverage provider from a dealership to an insurance company, make sure to add GAP insurance to your insurance policy before canceling your dealership GAP coverage. This way, you’re protected in the unlikely event that your car is damaged while you’re changing your GAP coverage.

It’s also a good idea to review the exact terms of your GAP insurance as outlined in your contract with the dealership before you decide to cancel. Details like the maximum amount covered and your eligibility for a refund can vary between different GAP insurance policies — and this is information that’s great to have while you’re comparing alternative GAP insurance coverage.

Can you get a refund on GAP insurance?

In some cases, yes, you can get a refund on GAP insurance. To see if you qualify for a refund from a dealership, check your contract and see if there’s any information on the dealership’s refund policy. If you bought your car within the past few months, there’s a good chance you’ll receive a full or partial refund on your GAP coverage. That said, getting a refund on GAP insurance from a dealership can take some time because dealerships work with insurance companies to add GAP coverage to your loan or lease agreement.

Since you’ll likely need to contact the insurance company your dealership uses for GAP insurance, follow these steps to cancel and possibly receive a refund:

• First, contact the dealership to let them know you intend to cancel your GAP coverage, and request the contact information for the GAP insurance company they use — if you don’t already have that info.
• Next, get a copy of your purchase agreement. If you can’t find your purchase agreement, contact the dealership for a copy. Having this information on hand will make it easier to communicate with the insurance company.
• After that, talk to the insurance company your dealership used and ask them how to cancel your GAP insurance. Make sure to give them your current address, so they can send you a refund check if you qualify for one.
• Lastly, complete any paperwork the insurance company sends you and be prepared to wait up to six weeks for a refund check to arrive.

Getting a refund on GAP insurance that you purchased directly from an insurance company is a bit easier. If you have documents that show your vehicle was traded in or paid off sooner than anticipated when you purchased GAP coverage, you should be able to receive a refund by contacting your insurance company. Keep in mind that this usually only applies to drivers who paid for their GAP coverage in full upfront.

How long should you keep GAP insurance coverage?

As a rule of thumb, you should keep GAP insurance for one to two years before canceling your coverage. The exact amount of time you should keep GAP coverage depends on two main factors: the actual value of your car and the amount remaining on your lease or loan. Basically, once the difference between your car’s actual value and what you owe on it reaches the break-even point, you should contact your insurance company or dealership about ending your GAP coverage.

If you’re wondering, as many drivers do, how long GAP insurance lasts, you should know that GAP insurance doesn’t “expire” or otherwise end on its own once it stops being of value to you. So make sure you compare your car’s actual value to the amount you have left to pay off every few months in order to cancel your GAP coverage as soon as doing so makes sense.

You can use a resource like Kelley Blue Book or Edmunds True Market Value to determine the actual value of your car if you need this information to make a decision about your GAP coverage.

What to Remember About Canceling GAP Insurance

• Since GAP insurance only pays for the difference between your car’s actual value and how much you still owe on it, you should cancel GAP insurance as soon as you reach the break-even point where your car’s actual value is equal to what you have left on your loan or lease.
• You can cancel GAP insurance from either an insurance company or dealership. Canceling through an insurance company tends to be more straightforward since you can often cancel online or through an app. To cancel GAP insurance purchased from a dealership, contact them directly and ask what steps you have to take to cancel.
• After canceling GAP insurance, you may be eligible for a full or partial refund. If you are eligible, expect to receive a check by mail within six weeks.

Does your car insurance and registration have to be under the same name? In many cases, no.

Whether you want to buy insurance for a family member or are looking for car insurance coverage that applies to you if you borrow a friend’s vehicle, there are plenty of situations where registration and insurance for a car could be under different names. Although some insurance companies may refuse to insure a car that doesn’t have your name on the registration, many others are used to working with people in your situation.

With this article, we’ll take a look at when insurance companies will cover a vehicle if the registration is under a different name, so you can find the best coverage available in your area. We’ll also walk you through some common situations where a car’s insurance and registration could be under different names.

Do car insurance and registration have to be under the same name?

There are a number of situations where someone may want to obtain insurance for a car that’s registered under someone else’s name. Maybe you’re a young driver looking to purchase insurance for a car that you drive but your parent or guardian owns. Or you could be looking for temporary insurance coverage for a caregiver or visiting relative who frequently borrows your vehicle.

In nearly all states, there is no law that requires the insurance and registration for a car to have the same driver’s name. That said, individual car insurance companies may refuse to cover a car that’s not registered to the same driver that’s purchasing the insurance policy. The one exception is the state of New York, where the name on a car insurance policy needs to be the same as the name on the car registration.

If you’re trying to obtain coverage so another member of your household, such as your spouse or child, can drive a car registered in your name, you may be able to add them to your existing insurance policy. In some cases, you may need to add the other member of your household to your vehicle’s registration, meaning you’d both be registered drivers of the vehicle.

Will insurance companies cover your vehicle if it’s registered in someone else’s name?

Many car insurance companies will cover your vehicle if it’s registered in someone else’s name. Insurance companies may ask to contact the registered owner of the car for their information and approval, but only you will need to be listed on the insurance policy once it’s set up.

According to Fox Business, an insurance company may refuse to insure a car that’s not in your name if you have a driving record that shows DUIs or accidents where you were responsible. Insurance companies may also refuse to cover you if you’ve had gaps in your coverage history.

Some insurance companies may refuse to cover your vehicle if it’s registered in someone else’s name. This can be because of your specific arrangement with the vehicle’s registered owner or because of a general policy the insurance company has. That said, you should be able to find multiple insurance companies in your area that will offer you a policy — as long as you don’t have any serious violations or other red flags on your driving record.

You might also want to consider having both yourself and the vehicle’s registered owner listed on the insurance policy as drivers. This can make it easier to secure a policy. Depending on your relationship to the vehicle’s owner, it may even make sense to update the title to a car so that both of you are listed as owners.

Can you purchase car insurance for someone else’s vehicle?

Yes, there are a number of situations where it makes sense to purchase car insurance for someone else’s vehicle. For example, if you’re a parent or guardian and your college-aged child owns their own car but has left it at home while they’re away at an out-of-state school, your insurance company may be able to help you purchase an insurance policy for the parked or stored car.

Here are a few other situations where it might make sense to purchase insurance for someone else’s vehicle:

• If you frequently borrow a car owned by another member of your household
• If you have a teen driver in your household who owns their own car
• If you are a caregiver who drives someone else’s car as part of your job

In all of these cases, you may also have the option of being added to or adding someone else to a shared insurance policy. But you may find that the most affordable or simplest option for you is to purchase car insurance that covers a vehicle owned by someone else.

What is non-owner car insurance?

Non-owner car insurance is a form of coverage intended for drivers who don’t own cars but frequently rent or borrow vehicles. In terms of what it covers, non-owner car insurance is similar to liability coverage. Here’s an overview of what non-owner car insurance protects you from:

• Damage to other drivers as the result of a car accident (medical expenses)
• Damage to property as the result of a car accident (anything from a broken fence to a collision with another car)
• Legal expenses in the event that you’re sued for causing an accident

In general, non-owner car insurance is good to have if you frequently rent, borrow, or share cars. It’s not a perfect substitute for full-coverage car insurance (which is comprehensive, collision, and liability coverage), but it typically costs only a few hundred dollars annually, provides basic liability protection, and helps you avoid a lapse in your insurance history. Many insurance companies, including Geico and Progressive, can offer you long-term or temporary non-owner car insurance.

You should also know that non-owner car insurance typically doesn’t cover damage to the car you drive. In other words, if you get into an accident while driving a friend or family member’s car, they (or you) may have to pay for repairs out of pocket. Likewise, non-owner insurance doesn’t cover driving for business purposes, so it’s not the best choice if you’re renting or borrowing a car as part of a job.

What to Remember About Having Car Insurance and Registration Under the Same Name

• Most states allow a car’s insurance and registration to be under different names. Not all insurance companies will offer you a policy if you’re not the registered owner of a car, but many others will be prepared to give you coverage
• You can purchase an insurance policy for another member of your household, but you may need to be listed on the policy alongside the primary driver of the vehicle
• Non-owner car insurance might be a good option for you if you frequently rent, borrow, or share vehicles that you don’t own

Although shopping for car insurance is a frustrating and often confusing task, you are legally required to have this financial protection in place before getting behind the wheel of your car. For 49 out of the 50 states in the country, you’re required by law to carry an insurance policy.

Not only can we help you find the right insurance for your situation, but we can also explain why you need car insurance. Being in a car accident is stressful in many ways, so the last thing you want is to worry about paying for injuries and damage. Read on to learn more about how car insurance protects you.

How Car Insurance Protects You

Car insurance is designed to make sure everyone is financially responsible for what happens when they are behind the wheel. You can be held liable for any injuries or damages that happen when you’re driving and have an accident, and mandatory coverage was created to make sure everyone can pay for those damages.

Rather than paying for these costs out of pocket, your insurance company protects you by kicking in to pay any bills you’re responsible for in an accident.

When do you need car insurance and what coverage do you need?

Not only do insurance policies help with your financial responsibilities, but they also address the legal responsibilities you have to maintain adequate coverage. This can protect you from fines, a suspended or revoked license, and jail time.

Almost all U.S. states have minimum requirements for auto insurance (New Hampshire residents must provide proof of financial responsibility instead), but you can extend your protection by supplementing the mandatory policies with other coverage options.

Liability

This is mandatory coverage for most states, with minimum amounts established from state to state. Bodily injury liability helps with the expenses related to the injury or death of the other party when you are at fault for an accident. Property damage liability helps with damages done to third-party property caused by your driving. The lowest minimums across the country are around $10,000 per person for bodily injury and around $5,000 for property damage.

Comprehensive

Damages can occur from non-collision incidents as well. With comprehensive insurance, you’ll be covered for incidents like theft, vandalism, or falling objects. This coverage also helps with repairs to damage caused by animals, natural disasters, and weather conditions.

Collision

Collision insurance covers the damage to your vehicle from an accident where you’re at fault. It also covers you in the event of a hit-and-run, where there is no other driver to be held responsible. Collision coverage is generally purchased along with comprehensive to create a full coverage policy.

Full Coverage

This policy includes liability coverage as well as comprehensive and collision insurance. This isn’t mandated by state law but is often required by the lender who holds the lease or financing on your vehicle.

Personal Injury Protection

There are 16 states that require PIP insurance; for everyone else, it’s optional. This insurance assists with medical bills and lost wages if you or any passengers in your vehicle are injured during an accident. This coverage is sometimes termed no-fault insurance because it doesn’t matter who caused the accident for an individual to file the claim with their own insurance.

Uninsured or Underinsured Motorist

Though insurance is a requirement, you may get into an accident with a motorist who doesn’t carry insurance or who hasn’t taken out enough liability coverage to take care of your medical expenses. This protection could help resolve your costs in these situations. Some states require this coverage, while others leave it optional.

What is the cost of not having insurance?

Facing a car accident without insurance means assuming the financial costs of the incident from your personal resources. Adding up the costs for medical care, rehabilitation, lost wages, property damage and restorative services could lead to thousands of dollars. The National Safety Council estimates the average cost to be around $78,900 for a non-fatal accident, while an accident resulting in death costs around $1.5 million. Not only could you be responsible for damages to others if you are found at fault for an accident, but you still have to address your own damages or expenses incurred by the accident.

The average car insurance rates across the nation is $1,630 for a year of full coverage. This breaks down to around $136 a month and provides more than the minimum required for basic liability. To simply purchase the minimum required amounts, the average is closer to $480 for the year. Comparing the out-of-pocket costs for accidents without insurance and the costs for either minimum or full coverage makes it clear why car insurance is important for vehicle owners.

What are some of the other costs of not having car insurance?

Though the costs of paying for accident-related damages can be devastating, there are additional reasons why you need car insurance. Because car insurance is a mandatory purchase for the majority of drivers across the nation, there are legal consequences if you are caught driving without it. Car insurance laws in each state differ in terms of how uninsured drivers are treated. Those found guilty of driving without insurance could be charged with a misdemeanor and face various penalties. The most common penalties include the following:

• Suspended vehicle registration and driver’s license
• Fines that can reach upwards of $5,000
• Mandatory community service
• Jail time
• Vehicle impoundment
• Registration and license reinstatement fees

Many states have a progressive approach toward consequences, with the first offense often being a lesser consequence such as a fine and registration suspension. Repeat offenses often incur jail time and much higher fines. It is also more likely for a harsher penalty to be issued if an uninsured driver causes a collision.

Why You Need Car Insurance: The Bottom Line

The consequences of driving without insurance are serious, but they can be avoided by simply purchasing the best car insurance for your budget. Driving without insurance comes with penalties and the risk of financial devastation, and it’s simply not worth it. You need car insurance to meet state requirements and to protect yourself in an acccident.

Get the car insurance you need to protect yourself by shopping around and comparing rates to find an affordable option.

A policy number on an insurance card is a unique number assigned by your insurance company to identify your account. The number appears on your insurance card, bills, statements, and other documents about your account with the insurance company. It is a convenient way for the insurance company to quickly find all of the information about your account. It also saves you from disclosing personal information to anyone should you get into an accident or be pulled over.

If you’re an existing policyholder and want to compare rates, or you’re signing up for your first policy, you can check the prices of insurance plans in your area with our free online quoting tool by entering your ZIP code here.

Where can you find your insurance policy number?

The fastest and most common way to view your insurance policy number is on the physical insurance card provided to you by your insurer.

Typically between 8-10 characters long, it is also known as a policy number or member ID and is labeled as such near the top of your insurance card. Every insurance company has different layouts on their insurance cards, so there is no standard location for policy numbers. Speak with your insurance company or agent to get your number if you cannot find it.

If you have multiple vehicles on your plan, they might all be under a single policy number, or you might have a different number and card for each car. If you have unique numbers for each vehicle, it is common for only the last digit of your policy number to change. For example, if your first vehicle’s policy number is 000000000-1, you could expect your second vehicles policy number to be 000000000-2 if they are both insured under the same individual.

Another number that correlates with your insured vehicle is the vehicle identification number, or VIN, usually located underneath or near the insurance policy number. The VIN, unlike an insurance policy number, is a 16-digit number attached to your vehicle.

When your insurer sends a document regarding your insurance plan — whether a bill, statement, or service announcement — your name typically accompanies the policy number, address, and relevant information. Try to memorize your policy number to avoid digging through documents when you need it and don’t have your insurance card handy.

When do you need your car’s insurance policy number?

Below are three common examples of when you will need your insurance policy number.

After a Car Accident

If you are involved in a car accident, you will need your insurance policy number for you and the other driver to exchange, regardless of who is at fault. This exchange will give both drivers the information they need when filing their insurance claims to their respective insurance providers.

Insurance companies will usually handle the rest by communicating to determine the correct payouts and fault involved with the accident. You should provide the police with your insurance number to file a report after an accident. A police report serves as a record of the accident that can be useful to the insurance companies.

When Pulled Over by the Police

If the police pull you over, they will require your insurance policy number to determine if you and the vehicle are insured in compliance with laws in your state. Keep a copy of your insurance card in the glovebox to always have it handy for situations like this.

When Contacting Your Insurance Provider

Whenever you contact your insurance company or agent, providing them with your insurance number allows them to pull up the relevant information regarding your account. It also removes the hassle of giving extra information over the phone and keeps the conversation quick.

What do you do if you lose your insurance card?

If you misplace your insurance card, insurance companies will usually mail you a paper copy. Today, most insurance companies allow you to print a new insurance card from their online service, making it very handy if you need it in a pinch and don’t have the time to wait for it to come in the mail.

Always alert your insurance company if you misplace your insurance card, especially if you suspect it has been stolen. They can make a record of it and protect you from instances of insurance fraud.

It is a good idea to keep two copies of your insurance card, one on your person and one in your glove box if you need your policy number. You should read this more specific article about what to do if your insurance card or temporary card has been stolen.

Exchanging Insurance Policy Numbers

After an accident, you want to get the policy numbers of all the drivers involved. Insurance companies print different designs on their insurance cards, and you might not know exactly where to look in an emergency. Snapping a photo of the other driver’s insurance card with your phone is a smart call. This way, you have the necessary information of the other driver that you can use to file a claim with your insurance provider.

Make sure to verify at the scene of the accident that you have taken a photo of the front and backside of their card and possibly written down their name and contact information if you need more information later.

If you are currently in the market for a new insurance plan and wish to save money, try checking out this informative list about where you can look.

Things to Remember About your Insurance Policy Number

Every insurance plan has an insurance policy number and sometimes multiple people can share the same number if they are covered and listed under the plan.

Try to have a second copy of your insurance card available whenever you need it, and if it gets lost, make sure to contact your insurance provider to receive a new one immediately. If coverage lapses or you renew an older policy, your policy number might change. Make sure to update any record of your insurance number to ensure you’re handing out the current plan information and not an old one.

Lastly, if you are in the market for a new insurance plan, don’t forget to use our free online quoting tool to compare prices in your area by entering your ZIP code here.

Initially, it may seem a bit peculiar to envision someone buying auto insurance without a driver’s license. After all, if you can’t drive a car, why would you want to insure one? As it turns out, there are plenty of reasons why you may want to purchase insurance without a license. Perhaps you’re currently taking steps to obtain your license and want to have coverage as soon as you’re able to drive. In addition, you could own a vehicle that another household member drives. Or perhaps you’re a classic car collector and want to protect your automobiles even if you don’t drive them.

Whatever your reasons for buying car insurance with no license, we’re here to help you obtain the coverage you want. We’ll walk you through the steps involved when purchasing auto insurance without a license, give you an idea of your available options, and help you decide between the different types of car insurance coverage. 

Are you looking for affordable car insurance of any sort? Then, please enter your ZIP code to compare rates and find coverage that’s right for you.

Where can you buy car insurance without a driver’s license?

Whether you’re attempting to protect a vehicle that you keep in storage or want to purchase freeway insurance with no license, there are plenty of insurance companies that offer car insurance coverage to individuals without driver’s licenses.

There’s no avoiding the fact that it is more difficult to find no license car insurance coverage. Some insurance companies won’t be comfortable with selling insurance to someone without a license. But if you make a few calls and explain your situation, you will quickly find a range of insurance companies to choose from.

Before you purchase insurance for your vehicle, ensure that you consider multiple options to find the best combination of affordability and coverage for your situation. This is especially important if you’re hoping to find inexpensive car insurance without a license.

And when you compare auto insurance companies that offer coverage to customers without a license, you may find it helpful to begin with the ten largest car insurance companies in the United States:

• State Farm
• Geico
• Progressive
• Allstate
• USAA
• Farmers
• Liberty Mutual
• Nationwide
• American Family
• Travelers

The best way to find cheap car insurance without a license is to compare quotes from multiple companies.

Where can you find full coverage car insurance with no license?

Since what is often referred to as “full coverage” is usually a combination of liability, collision, and comprehensive coverages, let’s break down what each of these does. First, liability coverage helps you pay for damage to someone else’s property and/or their medical expenses if you’re found to be at fault for an accident. Liability coverage is required in many states.

According to the Insurance Information Institute, most drivers purchase optional comprehensive and collision coverage in addition to minimum liability coverage. 78% of drivers buy comprehensive coverage and 74% acquire collision coverage.

Unlike liability insurance, collision insurance is optional and covers losses related to your own vehicle/property. Collision coverage helps pay to repair or replace your vehicle if it’s damaged in a collision with another car or someone else’s property (such as a fence, a mailbox, etc.).

Lastly, comprehensive coverage — which is also optional — helps cover repair/replacement costs if your car is lost or damaged due to basically any other circumstances, including theft, vandalism, fire, natural disasters, or animal damage. Between collision and comprehensive coverage, basically anything that results in the loss of or damage to your vehicle — aside from regular wear and tear — will be covered.

Finding full coverage car insurance without a license may take more time than finding any car insurance coverage with no license, depending on your particular situation. This is because full coverage includes liability and collision insurance, which tend to apply only to drivers listed on your insurance policy. And if you don’t have a driver’s license, you’ll need to be named as an “excluded” driver on your policy, indicating that your insurance will not pay for damages if you’re behind the wheel in an accident.

Your best option for finding full coverage car insurance as someone with no license is to purchase a policy for another member of your household. In other words, make another member of your household (such as a spouse or relative) the primary driver on your policy. This way, they’ll be insured to drive your vehicle, and your automobile will be fully covered. Keep in mind that you still won’t be insured to drive your car as an excluded driver — even if you obtain your license. Contact your insurance company if you need to add or change the status of a driver on your policy.

Can you get AAA insurance with no license?

The short answer is sometimes. As with many other insurance policies, whether or not you can obtain AAA insurance without a license depends on your particular situation. Since AAA also consists of multiple distinct regional organizations, it’s possible that a AAA location in one area will insure individuals without driver’s licenses while a AAA branch in a different region would not.

You should also know that AAA insurance is only available to AAA members in many cases. Therefore, AAA insurance may not be worth it if you don’t think that AAA’s membership perks would justify the yearly payment. For reference, AAA membership costs approximately $60 per year for its Basic/Classic plan — and Premier can cost as much as $170 in some locations. That said, AAA members also receive reliable roadside assistance coverage and benefits like discounts at thousands of retailers across the United States.

Speaking of AAA membership, you don’t need a license to join AAA. For this reason, joining AAA is one of the simplest options for individuals without a license to obtain roadside assistance coverage which helps pay for services like battery jump-starts, towing, and flat tire changes.

Unlike with car insurance, AAA’s roadside assistance coverage isn’t restricted to a particular vehicle but to the AAA member. Basically, AAA will provide roadside assistance for any vehicle you’re in, whether you’re the driver or passenger. This makes AAA a good option for someone without a license who frequently travels with a caretaker or another member of their household.

What types of car insurance coverage are available if you have no license?

What type of coverage you should purchase and how much insurance you need depends entirely on why you want to obtain car insurance as someone without a license. Although you may have to speak with multiple insurance companies before finding one that can meet your coverage needs, virtually any type of auto insurance can be acquired by someone without a license.

Here’s a breakdown of some of the most common kinds of insurance coverage and why each of them may be helpful for someone without a license:

• Comprehensive coverage. This is great on its own for vehicles kept in storage and helps cover repairs/replacement if a car is damaged by anything other than a collision (like fire, vandalism, or animals).
• Collision coverage. It is recommended if you want to insure yourself or another household member to drive, as it covers repair/replacement if your car is damaged in a collision with another vehicle or someone’s property.
• Liability coverage. Since it’s required for driving on the road in most states, this is likely a requisite if you want to insure yourself or another member of your household to drive.
• GAP coverage. As it’s typically required if you’re leasing a car, GAP coverage pays for the difference between what you owe on a vehicle and it’s actual value if it’s totaled before you’ve paid off the lease or loan.

What to Remember About Buying Insurance Without a Driver’s License

A driver’s license isn’t a requirement to obtain insurance, but some car insurance companies will refuse to sell policies to people without driver’s licenses. Explain your situation to an insurance company to determine if they’re able to meet your coverage needs.

In addition, obtaining full coverage car insurance without a license may be more difficult than merely acquiring comprehensive coverage. Your simplest option might be to make another member of your household the primary driver on your policy.

Furthermore, AAA membership doesn’t require a driver’s license and helps pay for roadside services for any vehicle as long as the driver or passenger is a AAA member. Therefore, it can be a great option for roadside assistance coverage if you don’t have a license.

Whatever your reason for purchasing car insurance, you can save by comparing the different coverage options available to you. Find out how much you could lower your insurance rates by entering your ZIP code today.