Do both owners of a car need insurance?

Owning a car can be expensive, especially when it comes to insurance. If you co-own a car with someone else, you may wonder if you both need separate insurance policies. The short answer is no – you do not necessarily need two policies to fully cover a jointly owned vehicle. However, there are some important factors to consider when getting insurance for a car with multiple owners.

When Is Joint Coverage Recommended?

In most cases, joint owners who live together should be listed together on one policy. This is common for:

• Spouses
• Partners
• Parents and driving-age children

Listing all household members who drive the car helps ensure everyone is protected if an accident occurs. Insurance companies expect policies to cover all regular users of a vehicle.

Some key examples of when joint coverage works:

• A married couple shares one car. Both spouses are listed as owners and drivers on a single policy.
• A parent co-signed on a car for a high school student. The parent and teen are both listed on the insurance.
• Two roommates share ownership of a used car. They both drive it regularly and have a joint policy.

The insurance company will look at the driving history of all listed drivers when calculating premiums. Rates are based on the highest risk driver. Still, joint coverage is usually cheaper than two separate policies.

When Can Owners Get Individual Policies?

If the co-owners live apart and do not regularly drive the vehicle, they may not need joint coverage:

• A parent co-signed a car for a child who moved out. Only the driving child needs to be insured.
• Siblings inherited a car but only one drives it. A single policy in that sibling’s name is sufficient.
• An owner stops driving due to age or disability. The other owner can get individual coverage.

In these cases, the owners have insurable interests in the car but aren’t regular drivers. One policy listing the primary driver is enough.

Some insurance companies may require an exclusion form to omit a co-owner from the policy. This states the excluded owner will not drive the vehicle.

Key Takeaway: Joint policies work best for co-owners in the same household. Individual policies may suit owners who live apart or share minimal driving duties.

Why List All Regular Drivers?

Naming all regular drivers on a policy provides protection that benefits all owners. Here’s why it matters:

1. Meet state minimum requirements.

All states require minimum liability coverage. This helps pay for damage and injuries you cause in an at-fault accident. Minimums vary but commonly start around:

• $25,000 bodily injury per person
• $50,000 bodily injury per accident
• $25,000 property damage

Policies must provide at least these amounts, regardless of the number of listed drivers. Don’t try to skirt state minimums by omitting regular drivers.

2. Avoid coverage gaps after accidents.

Your insurer can deny a claim if an unlisted owner or household member was driving and got in an accident. This leaves you to pay auto repair and medical bills out of pocket.

Adding all regular drivers closes coverage gaps that could cost you thousands.

3. Prevent insurance fraud accusations.

Insurers can cancel your policy if you provide false information. For example, you list an owner as a “permissive” (non-regular) driver so their poor driving record doesn’t raise your premium. If they actually drive the car regularly, that’s grounds for fraud.

Simply list all regular drivers to avoid misrepresenting who uses your car. This keeps your policy valid and reduces fraud risk.

4. Simplify claim payouts.

If both owners are listed on the policy, it’s clear who should receive accident claim payments. Joint coverage avoids headaches deciding who gets what or if repairs need to be split between owners.

The bottom line: Listing all household members or regular drivers who share the car protects all the owners. It provides proper coverage, reduces fraud potential, and makes claims easier to handle.

How Do Insurance Companies View Joint Ownership?

Insurers understand that co-owning cars is common among household members. Because of this, they offer options to simplify joint coverage.

Spouses and partners

Married couples often get a discount for combining coverage rather than having two separate policies. Insurers consider them lower risk than single policyholders.

Unmarried couples can still get joint coverage at many companies. However, discounts may only apply to legally married spouses.

Parents and teens

Most companies allow parents to add licensed teens to their policies. This gives teens coverage under their parents’ policy while they gain driving experience. Premiums increase due to the added risk profile. But joint coverage is still cheaper than the teen getting an individual policy.

Roommates

Roommates without familial ties can also get joint coverage on a shared vehicle. The insurance company may require documentation like:

• Both owners’ names on the car’s title
• A signed statement declaring joint ownership
• Address verification showing both parties live at the insured location

The key: Insurers understand cars are often jointly owned within households. Multi-owner policies are common if proper documentation is provided.

What Factors Affect Premiums?

Premium costs for a jointly owned car depend mainly on:

• The primary driver’s record
• The number of listed drivers
• Driver ages
• Vehicle use (work or personal)
• Car make, model, and year
• Your state’s minimum requirements

In particular, the primary driver’s driving history, age, and risk factors have the largest impact. All else being equal, adding more drivers raises rates somewhat. But the additional increase is minimal compared to the primary driver’s influence.

Shopping around helps find the best rates. Compare quotes from multiple insurers and look for available discounts to maximize savings.

Steps for Getting Joint Coverage

Follow these steps when getting insurance for co-owned vehicles:

1. Decide which owners to list.

Include household members and regular drivers. Exclude remote owners who rarely or never drive the car.

2. Gather documentation.

Have paperwork showing joint ownership ready. This may include the vehicle title, registration, bill of sale, or a joint ownership statement.

3. Compare provider options.

Shop quotes from top insurers that offer multi-driver policies. Look for discounts like multi-car, safe driver, good student, and more.

4. Inform agents of all regular drivers.

Provide accurate lists of all regular drivers when applying for coverage. This prevents misleading insurers about who uses the car.

5. Review policy documents.

Verify all owners are properly listed when you receive policy forms and insurance cards. Double check that coverage meets state minimums.

6. Adjust drivers as needed.

Contact your insurer if regular vehicle usage changes. You may need to add or remove drivers if ownership situations shift.

Tip: Comparing quotes every 6-12 months helps you find the best ongoing value. Premium costs can fluctuate and discounts may apply over time.

Common Questions About Joint Car Ownership Insurance

Some frequently asked questions can help clarify when joint coverage is required versus individual policies.

Do both owners’ names have to be on the insurance?

Not necessarily. If owners live together and both drive the vehicle, joint coverage listing both is recommended. However, if one owner doesn’t drive the car, their name doesn’t need to be included.

Can parents and teens share one policy?

Yes, teen drivers can be added to their parents’ policy. This provides coverage while avoiding the high rates of stand-alone teen policies. Insurance cards list the named insured drivers only.

What if an unlisted owner drives and has an accident?

The insurer can deny a claim if an owner not on the policy was driving. The unlisted driver would be responsible for damages and medical payments out-of-pocket.

Can policies list a spouse who doesn’t drive?

Yes, non-driving spouses can be included for ownership documentation purposes. However, some states may prohibit listing non-drivers solely to obtain spousal discounts.

What if owners move to separate homes?

If owners live apart, the primary driver should get an individual policy. The remote co-owner likely doesn’t need to be listed anymore.

The Bottom Line

Joint auto coverage offers protection when cars have more than one owner. But both owners do not necessarily need separate insurance policies. Here are some key points to remember:

• Household members who regularly drive should be listed together.
• Owners who live apart or share minimal driving duties often only need one policy.
• Listing all regular drivers prevents gaps in coverage and claims hassles.
• Shop around to find affordable premiums, especially for owners with less-than-perfect records.
• Adjust drivers listed as ownership situations evolve over time.

With the right joint coverage approach, cars with multiple owners can stay fully protected. List regular household drivers, follow state insurance minimums, and shop around for the best rates.