Does a Vehicle Have to Be in Your Name to Insure It in Texas?
You generally can’t get insurance for a car you don’t own, but you have other options if you regularly drive someone else’s car.
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Written byJanet Berry-Johnson
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8+ years writing about insurance, taxes, and personal finance
Certified public accountant
Janet applies her experience in personal finance, taxes, and accounting to make complex financial topics accessible. Her byline has appeared on numerous web media.
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Edited bySara Getman
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Sara Getman is an Associate Editor at Insurify and has been with the company since 2022. Prior to joining Insurify, Sara completed her undergraduate degree in English Literature at Simmons University in Boston. At Simmons, she was the Editor-in-Chief for Sidelines Magazine (a literary and art publication), and wrote creative non-fiction.
Outside of work, Sara is an avid reader, and loves rock climbing, yoga and crocheting.
Updated August 27, 2024
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Table of contents
Occasionally, you might drive a car you don’t legally own. Maybe you regularly drive a family member’s car or a company car. While buying your own insurance on the vehicle might seem like a good idea, most insurance companies in Texas won’t knowingly allow you to insure a car you don’t own.
Even if you manage to buy insurance, you might encounter complications if you need to file a claim. Keep reading to learn more about car insurance in Texas.
How to insure a vehicle that’s not in your name in Texas
In Texas, you might be able to get insurance on a car that’s not in your name because insurance agents typically don’t ask for a copy of the car title or registration. But this isn’t recommended because you lack an insurable interest in the vehicle.
What is insurable interest?
Insurable interest means having a legitimate financial stake in the vehicle, such as owning or leasing the car.[1]
For example, say your neighbor buys a truck, and you borrow it to haul some yard waste to the dump. If you’re involved in a car accident and total the truck, your neighbor suffers the financial loss, not you. So you don’t have an insurable interest in the vehicle.
When you might want to insure a vehicle not in your name
You might consider insuring a car you don’t own in several situations:
You drive a family member or friend’s car frequently.
You drive a vehicle provided by your employer for both work and personal use.
You and a friend or partner share a car, but the title is only in the other person’s name.
You drive a vehicle owned by someone you take care of, such as an elderly relative.
While these are all valid reasons for wanting to make sure the vehicle has adequate coverage, the owner of the vehicle likely already has coverage. In Texas, car insurance follows the car, not the driver, under permissive use. As long as you borrow the car with permission, you’ll likely be covered in an accident. But the owner of the car will be financially responsible.[2]
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Challenges of insuring a vehicle not in your name
Texas doesn’t have any laws explicitly prohibiting residents from insuring vehicles they don’t own. Still, it can be challenging for several reasons:
Insurance company requirements: Not all insurance companies will allow you to insure a vehicle not registered to you because they only cover vehicles when the policyholder has a clear financial interest.
Coverage denials: Car insurance companies might not want to provide coverage for a vehicle that they know isn’t in your name. This reluctance can limit your options when looking for a company to offer your desired coverage.
Claims process complications: Having a different name on the insurance and registration can complicate the claims process. In the event of an accident or damage, the insurance company may scrutinize your insurable interest in the vehicle more closely and delay or deny your claim.
Texas car insurance requirements
Texas has state-mandated minimum car insurance requirements designed to ensure all drivers have a basic level of financial responsibility for accidents and other damage they cause. Those minimum liability limits are:
$30,000 in bodily injury liability per person
$60,000 in bodily injury liability per accident
$25,000 in property damage liability
When you lease or buy a car with financing, your lender or leasing company will require more than the state-minimum insurance; they’ll usually want you to have full-coverage insurance. Full-coverage policies include liability coverage, as well as collision and comprehensive:
Comprehensive coverage
Comprehensive insurance covers damage to your car from non-collision incidents, like theft, fire, vandalism, and natural disasters.
Collision coverage
Collision insurance covers damage to your car resulting from collisions with other vehicles and objects.
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Registering a vehicle in Texas
Here’s how to register a car in Texas:
Get proof of insurance. Before registering a vehicle, you must have auto liability insurance that meets Texas’ minimum requirements.
Get the vehicle inspected. To ensure it meets the state’s safety standards, your car must pass a state safety inspection at an approved inspection station.
Visit your local county tax assessor-collector office. Bring your proof of insurance, vehicle inspection report, title or proof of ownership, proof of identity, and completed Application for Texas Title and/or Registration (Form 130-U) to your local tax assessor office.
Pay fees. Pay the required registration fees. Your fee will depend on the type of vehicle you’re registering and the county in which you’re registering the vehicle. Fees range from $50 for a small car to $200 for an electric vehicle, plus processing and state fees.[3]
You won’t be able to register a vehicle in Texas without insurance, and you’ll need to keep an active policy as long as you own the car.
If you’re caught driving without insurance in Texas, you could face stiff penalties, including:
Fines
Initial fines can range from $175 to $350; subsequent fines can be up to $1,000.
License suspension
Repeated offenses can lead to the suspension of your driver’s license and vehicle registration.[4]
SR-22 requirement
You may be required to get an SR-22. This is a form your insurance company sends to the state confirming you have insurance that meets the state-mandated minimums, and the insurance company will notify the state if your auto insurance policy lapses for any reason. Your insurance company may charge higher rates if you need an SR-22.[5]
Vehicle impoundment
In some cases, law enforcement will impound the vehicles of Texas drivers until they provide proof of insurance.[6]
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Alternatives to insuring a car that’s not in your name
Here are other options for insuring a vehicle not in your name.
Non-owner car insurance
Non-owner insurance provides liability coverage for drivers who don’t own a vehicle but regularly drive other people’s cars.
It can cover your liability if you’re at fault in an accident, but it doesn’t cover damage to the vehicle you’re driving or your own medical bills. This can be a good option if you frequently rent cars, borrow friends’ or family members’ vehicles, or need proof of insurance to reinstate a suspended license.
Add yourself to the owner’s policy
Another option is to have the vehicle owner add you as a rated driver on their insurance policy. Being a rated driver means you have the same coverage as the policyholder, and the insurance company may use your driving record, credit, and other factors when calculating rates.
Some insurance companies may not add you as a rated driver if you don’t live with the car owner. Even so, you’re covered when driving the vehicle with the owner’s permission because car insurance follows the car — not the driver — under permissive use. Still, if the insurance company will add you, it’s a good option for ensuring coverage extends to you.
Named-driver policies
A named-driver policy limits coverage only to drivers specifically named in the policy. If the owner of the vehicle has a named-driver policy and you use their car, even with their permission, their insurance won’t cover you unless you’re listed on the policy.
As of January 2020, Texas law prohibits insurance companies from issuing named-driver policies.[7]
Commercial auto insurance
Commercial auto insurance covers vehicles used for business purposes, including those driven by employees who aren’t the vehicle owners. Commercial auto insurance may provide higher liability limits than personal auto insurance policies, although it’s often more expensive.
If you regularly drive a company car for business and personal use, being included as a named driver on your employer’s commercial auto insurance coverage is the best option for ensuring you’re covered while driving the company car.[8]
Insuring a vehicle not in your name FAQs
Knowing when you’re covered while driving a car that isn’t yours can be confusing. Here’s some additional information about insuring a vehicle not in your name in Texas.
Can you insure a car that’s not registered to you?
You may be able to insure a car that’s not registered to you, but many insurers won’t allow it because you don’t have an insurable interest in the car. Insuring a vehicle you don’t own could also lead to complications if you’re involved in an accident or need to file a claim.
Do you need a license to buy car insurance in Texas?
You generally don’t need a driver’s license to buy a car in Texas, but you need some form of identification to register the vehicle. You also won’t be able to test-drive the car without your license, and you’ll need someone to drive it home because you can’t drive legally without a license.
Can someone drive your car if they’re not on your insurance in Texas?
Yes. Your car insurance policy extends to anyone driving the vehicle with your permission. You don’t have to add them to your insurance policy.
Do you need car insurance on a vehicle you own outright?
Yes. All vehicles registered in Texas or driven on Texas roads must have liability insurance at the state-mandated minimum limits, even if you own the car outright.
Sources
- IRMI. "insurable interest."
- Brian White Personal Injury Lawyers. "What Happens In Texas When You Let Someone Else Drive Your Car and They Get In an Accident?."
- TxDMV.gov. "Register Your Vehicle."
- Harris County Justice Courts. "Information about Traffic Cases."
- Department of Public Safety. "Financial Responsibility Insurance Certificate (SR-22)."
- Dallas Police Department. "Towing Uninsured Motorist."
- Texas.gov. "B-0010-19."
- III. "Business Vehicle Insurance."
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Janet Berry-Johnson
Janet Berry-Johnson, CPA is a freelance writer with a background in accounting and income tax planning and preparation. She's passionate about making complicated financial topics accessible to readers. She lives in Omaha, Nebraska with her husband and son and their rescue dog, Dexter. Visit her website at www.jberryjohnson.com.
Sara Getman is an Associate Editor at Insurify and has been with the company since 2022. Prior to joining Insurify, Sara completed her undergraduate degree in English Literature at Simmons University in Boston. At Simmons, she was the Editor-in-Chief for Sidelines Magazine (a literary and art publication), and wrote creative non-fiction.
Outside of work, Sara is an avid reader, and loves rock climbing, yoga and crocheting.