Most states allow different names on auto insurance and registration documents but some insurers may not be keen to go along with it for several reasons. This reduces the number of companies motorists can apply for and therefore they may end up paying higher premiums. Also, there may be other complications after managing to arrange the coverage the way you want. But, it is possible to insure a vehicle registered to someone else under certain circumstances, although it may be intricate.
Only several states like New York, New Jersey and North Carolina insist on seeing the same name on vehicle registration and insurance documents. And most states allow more than one name on the registration title that may be handy for people who would want to find a solution, which is more acceptable for insurers.
Most automobile insurers want to see insurable interest between the policyholder and the vehicle and owning it clearly satisfies this requirement. When an owner insures a car, companies know that they are the only beneficiary (along with lienholders, if there is a loan) when there are claims. Also, they believe that the owner will look after the car better because they are invested in it.
When someone else wants to insure a property, their intentions aren’t clear like above, which raises the concerns of insurance fraud and deliberate damage to collect money from the insurer. So, carriers have to take this possibility into account before they agree on coverage and they tend to charge more if they go ahead.
Often people may want to utilize the automobiles they don’t or cannot use by letting someone else drive them. If they live in the same household, this may be more acceptable. Otherwise, there is another problem of the vehicle being registered in one address and insured under another, which raises further problems and concerns and in some cases it may not even be possible.
For example, often it isn’t acceptable to many companies for parents to insure a car that will be driven by their children, who live in a different address with the car kept there. In that case, insurers would usually insist that the child insure the car even if it belongs to parents. So, this is usually an acceptable reason for having different names on the insurance and vehicle registration. In such cases, the child insures the car under their name and the owner’s (parent) name is endorsed on the policy as the additional insured. If there is a claim, the insurance company knows who is the owner and therefore who to pay.
At times, it may be easier, cheaper and more agreeable to transfer auto titles or add another name to it. The same approach would work with insurance as well since there can be two policyholders on the insurance documents. Most companies accept the fact that the owner insures the car mainly for the benefit of others. In such cases, the main driver can be clearly identified regardless of their name being listed as a driver or insured on the policy.
Even if everything is arranged the way you want or need with different names on insurance and registration, you may still have to explain why it is the case when you are pulled over by a patrol or police car. In any case, you may have to wait until they do a thorough check on the vehicle and you before letting you go.
Certainly, every person has different circumstances and requirements but conforming to the norms allow motorists to reach to the whole of the market and manage to get the cheapest auto insurance rates. That is why it may be worth making slight adjustments so that their names on insurance and registration match. If this isn’t possible, they will need to look for providers who will sell them insurance for a car they don’t own.