Insuring Somebody Else's Car

Teens in Sports Car
Getty Images/Reuben Schulz

Thinking of insuring your boyfriend's car? We all know what it is like to be in love. At least most of us do. It's great. At least most of the time. But it also can lead to some "fuzzy" thinking. That is, it sometimes causes a person to think and behave less than rationally. I suppose that's part of the fun, but it can also cause problems. Here's something more and more people are considering that may be rational or irrational: boyfriends and girlfriends combining their auto insurance policies.

That's right, unmarried couples are starting to purchase their automobile insurance together. And you thought relationships were hard enough? 

Insuring Somebody Else's Car

Life used to be simpler. That's what anyone who's been around awhile is likely to say. When it came to car insurance, married couples would get a joint insurance policy for the vehicles they owned. Single owners each purchased their own separate policies. It all made sense because it was all based on a fundamental principle of insurance coverage: insurable interest. The concept of insurable interest is pretty simple. In order to insure something (person or object), the policyholder (or their beneficiary) must have a valid, determinable, tangible interest in the thing being insured. With an automobile, for example, the insurable interest would be ownership in the vehicle itself. Seems obvious, doesn't it?

Life is not quite as simple anymore, though.

For one thing, with the advent of legally-recognized domestic partnerships and the huge number of unmarried couples living together, the lines between "married" and "single" have blurred. Today, lots of unmarried couples jointly own significant assets like real property, as well as share tangible interests in other items, like cars.

As a result, the clear distinctions between what an insurable interest is and is not have also become blurred, leading insurance companies to rethink the rules they follow in writing policies. 

One change a lot of insurers have made is to allow unmarried couples, including those in domestic partnerships, to purchase joint auto insurance policies. There are two main reasons for this. The first is that insurance companies understand that couples today, although not legally married, are nevertheless in long-term committed relationships that provide a level of stability and lower risk that insurers are looking for. Second, there is a growing demand for joint insurance by unmarried couples and insurance carriers want to get in on the action.

How It Works

That's a tough question to answer. Because this is a relatively new area of insurance, the processes and details involved are still evolving. There are a lot of factors at play, including state laws and varying insurance company rules and definitions. The truth is that if you are thinking about getting a policy that includes your boyfriend's or girlfriend's car, you are going to have to do some research and probably talk to several insurers to see, first, if they offer joint policies and, second, what rules they have to qualify.

Here are a few things to keep in mind:

  • What constitutes an "unmarried couple" for auto insurance purposes? This is one where definitions are varied and fluid. In most cases, a legal civil union will work. Another is when a couple that is living together in a domestic setting. In other words, under the same roof.  In fact, this one is almost always a requirement. One exception that a few companies are beginning to consider is couples who are engaged to be married but not living together. Again, you are simply going to have to do some shopping around to see what different jurisdictions and companies have to say on the matter.
  • The policy may have to be in only one partner's name. Then again, it may be in both names, depending on the particular insurer. Some companies will insist that one partner is the primary insured and the other named as a secondary or additional insured.
  • Couples will need to agree on one set of coverage types and limits. Oftentimes, each partner will come in with different types of coverage, limit amounts, premium costs, deductibles, etc. If they intend to combine their coverage into one joint policy, they will have to pick one set of coverage that applies to both partners and their vehicles.

Just Because You Can, Doesn't Mean That You Should

Most couples automatically assume that if they combine their insurance into one policy they are going to save money. Not necessarily. If one partner has a bad driving record, a joint policy may end up costing the partner with the better record more on his or her premiums. Also, remember that doing things jointly may end up causing problems when you want to "unjoin" them. 

So, let's return to the original question: Can I insure my boyfriend's car? The best answer is that you likely can do it but, when all is said and done, you may not want to.