insurance question

sniperman

hi folks,my son has just sold his car,he wanted to use his sisters car till he got another one,her car has been off road and declared so for a few months,he rang up his insurance company to change to her car and was told that he cannot insure it because its not registered in his name,can he register it without actually buying it,any advice welcome,thanks,not asking to do anything illegal,just we dont know the ins and outs of this kind of thing

bazz26

Insurance companies won't insure a car in your son's name if it's not registered to him as he has to have no insurable interest in it if it's damaged or destroyed. In other words, the insured party has to suffer an insurable loss if it's damaged or destroyed so technically your son would not suffer a financial loss on a car he doesn't own.

His sister has two options:

1. If she still has a valid insurance policy on it then she can just add him as a named driver to that policy.
2. If she doesn't then she needs to transfer ownership over to him so that he becomes the new registered owner and can insure it under his own name as his own car. Then transfer ownership back to her when he doesn't need it anymore. The downside to this is that it adds extra owners to the car which may not be much of an issue if it's a fairly old or low value car.

bazz26

Also worth noting that if he takes out a new policy of his own then it will be for a 12 month period. To cancel the policy earlier than that could mean the insurance company will refund some of the premium minus a hefty admin charge. Equally if he goes with monthly installments then they may look for a % of the premium up front as a deposit to cover themselves if he just cancels mid term.