Does your car insurance and registration have to be under the same name? Most U.S. states allow residents to register and insure their vehicles under different names. This is because the car's owner can be an approved driver on the policy rather than the primary policyholder.
However, having your car's registration and insurance in different names can make filing an insurance claim more difficult. However, most insurance companies conduct thorough investigations after you file a claim and will process it even if your car's insurance policy and registration names don't match.
This article covers common reasons for having car insurance and registration under different names and a few alternatives. It also lists steps to update your insurance policy or registration for consistent record-keeping.
Does Your Car Insurance and Registration Have to Be under the Same Name?
Although many U.S. states permit drivers to register and insure a vehicle under different names, the decision to insure a driver for a car that they do not legally own ultimately lies with the car insurance company.
New York is the only U.S. state that requires the insurance card and registration to be in the same name. In New York, if a driver uses two names on their vehicle's registration, both names must also appear on the car's insurance policy. Other states permit residents to use different names on their car's insurance and registration as long as drivers meet their unique policy requirements.
Auto Ownership, Insurance, and Registration: Everything You Need to Know
Understanding the difference between auto ownership, insurance, and registration can help you decide which processing technique is best for your situation. Owning a vehicle means that the car is registered under your name. If you own the vehicle, you most likely paid for the purchase or took out an auto loan in your name. You may also lease the vehicle in your name.
The car's owner possesses the title, which is required to register a vehicle in most states. A car title is a legal document that allows you to register a vehicle in your name. Many states also require drivers to show proof of insurance before registering a vehicle.
A policyholder refers to the person whose name is on the insurance policy. The policyholder is responsible for paying the down payment and monthly premiums to maintain insurance coverage. Additional drivers and vehicles at the same address as the policyholder may be under the same policy.
Common Reasons for Car Registration and Insurance with Different Names
Some of the most common reasons that a driver's registration and insurance policy may be under separate names include the following:
Your Child Buys an Insurance Policy for Your Car
Some parents may ask their children to purchase their own insurance policy if they gift or allow them to drive a vehicle in their name. While most states will allow the registration and insurance policies under different names, policyholders must follow the insurance carriers' contract specifications.
For example, some insurance providers may require the parent and child to live at the same address. Others may cover college students who live in the same state but not a different one.
The auto insurance company may sometimes make exceptions to the rule of living in the same household, such as for college students who use their family's vehicle while away at school. Some insurance companies may even offer discounts to policyholders who add young or new drivers to the policy, even if they live in different states.
You Add Your Child and Their Vehicle to Your Insurance Policy
Parents may sometimes add teen drivers to their existing policy to help offset higher insurance rates. Younger drivers or those with a lot of traffic violations tend to pay the highest premiums. While most insurance companies allow this if you live at the same address, each driver must be listed on the policy. Otherwise, your teen driver may not be covered in the event of an accident.
Your Family Member or Friend Is a Primary Driver of Your Car
If a family member or friend who lives with you is the primary driver of your vehicle, they may purchase a car insurance policy in their name rather than yours. You'll need to insure your family member or friend if they drive your vehicle regularly. If your friend only uses your car occasionally, you don't have to purchase an insurance policy for your car under their name.
Your Roommate Drives Your Vehicle
Some states require all eligible drivers who live at the same location where a vehicle is registered to be included in the policy. Some insurance providers may consider excluding household members from their coverage if they never intend to drive the vehicle, but this will vary depending on the specific provider.
A non-owner insurance policy may also be an option if your roommates drive your vehicle frequently. A non-owner insurance policy protects the vehicle's driver if they're responsible for an accident by helping pay the cost of property damage or personal injury.
You Co-Own the Car with Another Person
If you and another person share vehicle ownership, the name on the vehicle's registration can differ from the insurance policy. However, both drivers should have sufficient coverage on the vehicle. One owner may purchase the policy and then list the other owner as a covered driver.
Always remember to explain your situation to your insurance agent before registering the insurance policy for your vehicle under a different name. If you don't own the car, you need to seek the consent of the vehicle's owner.
Disadvantages of Having Different Names for Car Registration and Insurance
While having your vehicle's registration and insurance under different names may be possible, it's essential to be aware of the potential disadvantages.
First, insurance providers may deny coverage if your car registration doesn't match your name. Some insurance companies may only sell you a policy if the named insured matches the vehicle's registration.
Additionally, using different names for your vehicle insurance and registration may cause problems when filing a claim. This is because having different names for these documents can confuse the insurance company during the claims process, and the company may pay the claim to the registered owner rather than the insured driver.
The insurance company will also investigate following a claim. If the insurance adjustor finds that the car's owner differs from the covered driver on the policy, they may delay or even withhold the settlement payment.
Sometimes, vehicle owners with poor driving history insure their cars under the names of friends or family members to avoid paying expensive insurance fees. If your insurer suspects you used a different name to avoid the high insurance premium, they may refuse to pay your claim. The insurance carrier may also report you for insurance fraud.
Alternatives for Insuring a Car That is Not in Your Name
Instead of purchasing a car insurance policy under a different name than the vehicle's registration, consider one of the following alternatives:
Include the Owner's Name in the Insurance Policy
Buy an insurance policy as a vehicle owner and add the name of a non-owner to the policy. If you use a car that belongs to another family member and live in the same household as them, ask them to add your name to the vehicle's insurance policy. This makes you a covered driver.
Put the Driver's Name on the Car's Registration
If you buy a car for a family member, you can add their name to the vehicle's registration to make the process more seamless. Most state laws let residents use two or more names on a vehicle's registration, and adding a new name to a title is usually simple.
Transfer the Vehicle's Title to the Primary Driver
Alternatively, you can ask the car's owner to transfer ownership of the car to you. Transfer of ownership requires the new owner to add their name to the car's title. In some U.S. states, the law demands that new owners apply to the local Department of Motor Vehicles or Secretary of State to change the name on a vehicle's registration. Other states allow residents to transfer ownership just by filing paperwork.
Purchase a Non-Owner Insurance Policy
A non-owner insurance policy provides coverage for drivers who don't own the vehicles they use. This policy is an excellent option in certain professions, such as nannies and family chauffeurs. If you get into an accident while driving the car, a non-owner insurance policy will protect you against damages.
How to Buy Insurance for a Loaned, Leased, or Gifted Vehicle
If you finance or lease a vehicle, you may be subject to the lender's rules. Since the lender has a financial interest in the vehicle, they may require an insurance policy that shows the buyer as the policyholder.
Insurers usually require proof of insurable interest from those seeking insurance policies. This is to ensure that in the event of an accident, the policyholder will be responsible for covering auto repair bills.
This means that you'll be financially responsible for maintaining the insured vehicle, which might be difficult if you don't own the vehicle. Your lender may not allow someone else to insure your vehicle unless they're listed as a co-owner or a co-signer.
If someone gifts you a car, you should request that they also sign over the car's title. By signing over the vehicle's title, you can register the car under your name and purchase an auto insurance policy in the same name.
How to Match Your Car Registration and Insurance Policy
Matching your auto insurance policy to your vehicle's registration can make filing a claim easier. Here are a few ways to ensure consistent information on both legal documents:
- Choose the best insurance type: You'll need proof of insurance before registering a vehicle, whether buying, financing, leasing, or receiving it as a gift. Consider whether a non-owner policy makes sense. If not, compare insurance policy rates to find the best coverage for your needs.
- Register your vehicle with the state: Once you have proof of insurance, you can register your vehicle with the state's department. You'll need the vehicle's title, a valid ID, and the vehicle identification number for registration.
- Change the name on the car insurance: If you want to match your owner's insurance policy to an already registered vehicle, contact your insurance provider. You can also request quotes from new providers in your name or consider a joint car insurance policy.
- Update the name on the vehicle registration: If you want to match your vehicle registration with your insurance policy, you'll need to update the car's title. Once you own the vehicle and possess the title, you can register the car with your state department.
Always be upfront with the insurance company when purchasing a policy. Before you use a different name to insure your car, ensure that your insurer's policies don't prohibit this practice.
Many people wonder whether their car insurance and registration have to be under the same name. Although state laws generally permit them to be under different names, insurance providers may have varying policies. Moreover, having these documents under different names can also cause delays in the claims process.
Idalia Garcia
Insurance Editor
Idalia Garcia is a licensed insurance agent with extensive knowledge of various insurance lines. She has more than 12 years of experience in auto insurance and 10 years in property insurance.
