You can insure a car in someone else's name - as long as you're honest about who will be driving the car. If not, you could end up committing insurance fraud.
Here's what you need to know.
Yes. Ownership isn't required to buy car insurance.
For example, your mum might lend you her spare car on the condition you insure it. You can get insurance for that car, in your own name, even though your mum is the registered owner.
However, it is extremely important to be honest with your insurance company about who the primary driver is. If you name someone as a primary driver, knowing that they won't actually be the primary driver, you could be committing insurance fraud.
For example, if you own a car but you pay high premiums because you're a new driver, you can't name your mum as the primary driver just because she has more experience and the policy would therefore cost less.
This is illegal. It would likely void your cover, lead to a claim being rejected, and could even land you with a criminal record.
There is a duty not to make a misrepresentation. Saying someone is the regular driver when they are not, in order to obtain a cheaper premium is a breach of this duty. This gives the insurance company the right to void the policy and not pay and claim if fraudulent or if they can prove that, had they known, then they wouldn't have insured the car.
Don Shields
Insurance broker
If you own a car, whoever is driving it most frequently should be named as the primary driver on the insurance policy.
If you still drive the car regularly you should be named as an additional driver. If you never drive the car, and have no intention of driving it, you might want to remove your name from the policy altogether. In that situation, your car would be insured in someone else's name.
There are plenty of situations where you might have your car insured in someone else's name, including:
- Your adult child moves to another city and you lend them your car while they save for their own
- You go on an extended trip and lend your car to a relative while you're away
- You suffer an injury or illness which prevents you from driving, so lend your car to a friend while you recover
⚠️Warning: If you are trying to insure a car you own in someone else's name, but you know you will be the primary driver, this will likely void your cover and could be deemed insurance fraud.
You do not need to own a car in order to buy insurance for that car.
As long as you are the genuine primary driver for that vehicle, and you have permission from the owner, you should be able to buy insurance.
There are plenty of situations where you might want insurance for a car somebody else owns, including:
- Your friend moves overseas for a year and lets you use their car while they're away
- Your parents buy a new car and let you use theirs until you save for your own
- Your elderly relative can no longer drive, but you offer to take them to appointments in their own car
Some insurers require the owner of the vehicle to be named as a driver on the insurance policy, but others don't. Be aware, if you buy insurance for a car someone else owns, and you make a claim, the owner of the vehicle will receive the money from the insurer.
⚠️Warning: If anyone asks to use your name you as the primary driver on their car insurance, do not agree to this unless you are genuinely the primary driver. They could be committing insurance fraud and you may be implicated.
Often, young drivers will be named on their parents' car insurance policy because everyone is sharing the family car. However, it's important to consider who the primary driver will be and share that information with the insurer.
If one of the parents will be the primary driver, the young driver can be named as an additional driver. However, if the young driver is going to be the primary driver, they should be listed so.
While this will likely make the policy more expensive, it does mean the young driver can start building their own no-claims bonus.
While it can be tempting to put your car insurance policy in the name of another driver for the sake of a cheaper premium, this is considered insurance fraud. Luckily, there are other ways to reduce the cost of your premium. Many insurers allow you to adjust your excess; the higher your excess, the cheaper your premium. Remember, you still need to be able to afford your excess so adjust this responsibly.
Gary Ross Hunter
Insurance and innovations editor
Getting a cheaper car insurance premium is much easier if you know where to look for savings. Here are some suggestions that don't rely on changing the name of the policyholder.
1. Look for online discounts: Many insurers offer 10-15% discounts when you purchase an eligible policy online. This can translate to over $100 in savings annually.
2. Keep your mileage low: Have a look at how many kilometres you actually drive and ensure your policy reflects this. The less you drive, the cheaper your premium. Avoid the temptation to underestimate your mileage. This can hit you in the pocket if you need to make a claim.
3. Restrict drivers: Restricting how many people will drive your car or restricting younger drivers altogether can reduce the cost of your premium. Remember, only do this if you're sure you'll be the only driver.
James Martin
Editor of insurance at Finder
Unlisted drivers can be covered in a variety of ways by car insurance.
Depending on the policy, car insurance might:
Often you’ll be able to choose which of these options you'd prefer. However, some insurers provide a limited range or restricted options.
Important: Always take the time to fully read your product disclosure statement (PDS) and understand exactly how unlisted drivers are covered.
You're breaching your duty of disclosure to the insurance company. If you have an accident and you're found to be the main driver, your policy could be void and your claim denied.
While you might be saving money in the short term, it's highly risky, illegal behaviour.
If you want cheap cover, there are other ways to lower your insurance premium, including:
See the likely insurance costs for 8 famous petrol heads.
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