Car Insurance – is it possible to insure borrowed cars?

I had a phone call this week from a gentleman looking for car insurance.  He told me he was having real difficulty getting car insurance on a vehicle, and it was frustrating him as he thought it would be really easy.

The vehicle was a lease car, in the name of the mother of a director of a business he was purchasing, and as part of the deal he would be allowed to use the car if he wished, but the deal was he had to insure it himself.

Of course, when it came to getting quotes for car insurance, the circumstances meant nobody would quote him.

I explained some of the reasons this could have been and what he would need to do to insure it:

1.  No insurable interest – he currently doesn’t own the car, nor does he have a financial interest by means of a lease agreement, so he can’t insure it

2. He would need establish a legitimate insurable interest in the vehicle, but this would mean changing the lease agreement to his name.

3. Another way he might be able to drive it is if the lady who has the lease could have him added to her car insurance policy as a named driver.

Car insurance can be tricky sometimes, people often lend cars to friends, family and business acquaintances, but rarely think about whether the car will be insured properly.

Before going into any loose agreements with borrowing cars, just take a moment to think about the following:

• Who is going to insure it?
• Can any formal agreement be put in place and if so would this be allowed if the car is already leased?
• Will the current car insurance be adequate or does it need to be changed?
• If the current car insurance can’t be changed, can the person needing to drive qualify to buy insurance on that car?

I would suggest checking these things before doing anything else!