CAN I INSURE A CAR UNDER MY NAME IF THE OWNER IS FINANCING I

by Guest » Wed Apr 14, 2010 04:47 am
Guest

HOW CAN I NSURE A VEHICLE THAT IS FINANCED UNDER MY RELATIVES NAME

Total Comments: 8

Posted: Wed Apr 14, 2010 05:09 am Post Subject:

You contact an insurance company and/or agent and ask for a policy. You only need to have an insurance interest in the vehicle to insure it. It sounds to me like you will be the primary driver/user. As such, you do meet this definition. The problem with this situation is that the owner (your relative) might be held liable for your use of the vehicle. Unless they are listed on your policy, they would not get coverage from it.

If it's financed you will probably need to obtain comp/coll coverage as well.

Posted: Fri Apr 23, 2010 03:03 pm Post Subject: Policy is under your relative’s name and list you as a drive

The proper way to insure that vehicle would be to have the policy under your relative’s name and list you as a driver. Most of the time the lien-holder will require it to be that way as well. That would afford coverage to the owner of the vehicle as well as extend coverage to you as the driver. However, if you are not living in the same household, some insurance companies may have a problem with this, as dependent on the state you are in, doing so could extend PIP coverage to two households.

Posted: Fri Apr 23, 2010 06:20 pm Post Subject:

Many companies will not insure this situation at all. Typically, a company will not allow you to list a driver on the policy unless they live in the household. So getting a policy in the vehicle owners name and listing you as driver, might prove challenging unless you live with them.

Conversely, most companies will not allow you to add a vehicle to your policy that is not registered in your name.

As a result, for years this has been a very difficult situation to insure.

Fortunately, a couple companies are now insuring this situation. They will write the policy in your name, add the vehicle to your policy and list the owner of the vehicle as an additional insured. This will provide coverage for you, the vehicle and the vehicle owner. It should also be acceptable to the lienholder. As I understand it, Progressive and Safeco will both do this. Hope this helps.

Posted: Thu Feb 28, 2013 05:21 am Post Subject: Insurance

I live in California, vehicle is under my name and is still under a loan. My soon to be ex in Rhode Island wants me to send the vehicle and she pay the insurance on it. Is that possible ?

Posted: Thu Feb 28, 2013 10:09 am Post Subject:

You can't give away a property that isn't yours in the first place. You still owe your lender, and he's still in possession of the title to your car . When the vehicle changes hands, your wife will need the title to be the owner, which is not possible. And unless she owns it, she won't be able to buy insurance.
Well, if you pay off the loan, thereafter you can do whatever you want.

Posted: Thu Feb 28, 2013 12:57 pm Post Subject:

You can't give away a property that isn't yours in the first place. You still owe your lender, and he's still in possession of the title to your car . When the vehicle changes hands, your wife will need the title to be the owner, which is not possible

This statement is 100% wrong.

Of course the OP can "give away" or "sell" his interest in [and physical possession of] property that he's on title to as the registered owner -- that happens all the time. There's no law that prevents this from happening. A vehicle that is a total loss, for example, becomes the property of the insurance company that pays the claim. It's still up to the insured to pay off the note. The insurance money may or may not do that, whether it's paid to the lender directly or not. A vehicle traded in on another one becomes the property of the car dealership. Having "clear title" is an entirely different matter.

What changing the registered owner (or state of registration) does not do is relieve the OP of the obligation to pay the debt he owes on the vehicle. The lender remains the legal owner until that happens. If he continues to assume the liability of paying off the debt, the OP can ship the car to his friend Nikolai in Siberia and it would be fine -- but Nikolai will not have "clear title" -- he could not borrow money against the value of the vehicle without it. The car dealer that takes a vehicle in on trade does not allow the note to go unpaid -- it pays off the note and adds any unpaid balance to the purchase price of the replacement vehicle.

You cannot confuse the contractual matter of paying off a loan with the insurability issue of having possession of the property as the "registered owner" of a vehicle secured by a loan. However, the lender can prevent such a transfer of interest/possession.

In order for the lender to not allow such a transfer of interest, there must an express provision in the contract to prevent this. It would typically be found in an "acceleration" clause, and would be stated something like: "In the event the vehicle that secures this note is no longer registered in this state or to the borrower(s) named hereunder, the entire unpaid balance of the loan shall become due and payable in full." The lender does not have to exercise its right under that provision. If the borrower can prove to the lender's satisfaction that he will continue to pay the debt, they won't accelerate the note. (Failure to exercise the provision, however, can create an estoppel against the lender, which is a different discussion, best reserved for another thread.)

That's the only thing which could interfere with the transfer of the [registered] "ownership" of the vehicle to the about to be ex-wife in Rhode Island or Nikolai in Siberia or the insurance company that pays a total loss claim. Once the note is paid off, the person with physical possession and registered owner status may retitle the vehicle in his or her name only.

Posted: Thu Feb 28, 2013 02:04 pm Post Subject:

Of course the OP can "give away" or "sell" his interest in [and physical possession of] property that he's on title to as the registered owner -- that happens all the time. There's no law that prevents this from happening.


Actually, they could not do this. The lien holder would be listed as just that... a lien holder. Law prevents the other person from selling (transferring ownership) of the property to another person without the lien holders consent. The lien holder is not going to give their consent until they are paid.

Posted: Thu Feb 28, 2013 03:02 pm Post Subject:

It is possible to convey "registered owner" status without impairing the lender's title by lien. Those are two different things. The new registered owner does not have clear title and cannot use the vehicle as collateral for another loan without clear title. Parents do this with their children all the time.

My example of the total loss situation is exactly that same scenario. The insurer acquires "ownership" and takes possession of the vehicle by paying the claim. The debtor may still have to come up with additional cash to pay off the note. Will the lender not allow the insurance company to take possession of the vehicle until the debt is paid? Of course not. The only thing the insurance company cannot do is dispose of the vehicle until it obtains clear title.

As I stated above, the lienholder's interest and other rights are expressed in the loan contract, and contract law prevails (there are no other laws that apply). If the loan contract fails to address a change of registered owner (or change of domicile from State A to State B), the registered owner if free to convey his/her interest, subject only to any acceleration clause. However, if the loan contract says, "You may not transfer ownership of the vehicle to any other person, or register the vehicle in another state without our prior written permission" then it cannot be done.

So just like insurance contracts, one must read the loan contract to know for sure.

People enter into "take over payments" transactions all the time -- with and without the lender's knowledge. Unless the loan contract prohibits such transactions. I can sign off on my registration, hand it to the purchaser of my vehicle, and they can go to the DMV and reregister the vehicle in their name. But it does not convey clear title to the vehicle, and I remain obligated to pay the debt. I may no longer have the vehicle or know its whereabouts when the lender comes looking to repossess, which is why they don't have to allow such a property transfer -- if they say so in the contract.

The lienholder will be notified of the registration change and can then invoke whatever contractual rights it has, including acceleration of the loan enforceable on the original borrower..

Obviously, enlisting the cooperation of the lender in advance is a better choice.

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