Insuring a car that isn't yourown

A guy I know runs a cheap car insurance website ( and regularly he has people phoning to ask if he can arrange cover for cars that don't belong to them. The answer always is: yes he can but it will be extremely expensive. A lot of these prospective customers are not greatly happy about this; so why should this be the case?

Why should it be more expensive?

Car insurance used to be something handled by brokers who acted as a link between the client and the insurer. Then the Internet arrived with the impact of an atom bomb. Whereas once upon a time actual people would be involved in processing an application and calculating a premium, this is all now automated and a computer program does all the work.

This is all well and good for the 99% of people who fit into the standard pattern for motorists; insuring their own car, resident in England long-term, with a fixed address, a recognised occupation, a fairly common car and a driving record which can be checked. The odd 1% who don't fall into any of these categories have a problem because the computer system simply will not handle them! This means that the only way in which they can get cover is usually to go to a broker; if they can find one.

There is however another question.

Why should anyone want to insure a car that they did not own?

This should ring alarm bells with any insurer. Is this an attempt at fraud? Does the applicant intend to steal the car? Would the owner be aware of the car being used in this way? These are all perhaps unlikely scenarios but nevertheless the insurer is entitled to ask the question.

The applicant may of course be a friend of the owner, and is being lent the car long-term. Alternatively he or she may be employed by the owner, and be given use of the car from time to time. Again perhaps this is a son or daughter coming back from university for a few weeks or months who wants to drive a parent's car. These are legitimate reasons for insuring the vehicle but there are so few instances that the automated systems are simply not programmed to deal with them.

There are answers of course. The other driver could be added to the owner's own policy, and the fact that this can be done so easily and cheaply in most instances could raise suspicions in the insurer about whether an application for a separate non-owner policy was genuine.

Alternatively the applicant could take out a short-term car insurance policy from one of the companies that specialise in this type of business. Most of them are happy to cover someone for a vehicle owned by someone else, provided that the driver has the owner's permission. The drawback of course is that in most cases cover is restricted to a maximum of 28 days, after which a new policy has to be taken out, and it can prove a lot more expensive than having a conventional 12 month policy if the clients needs long term cover.

One thing is certain. if there is enough demand for a policy of this type some insurer will work out a way of providing it. Once one does they all will. After all, car insurance is a cutthroat business with thin margins on conventional business, and niche markets like this could prove very profitable!