can I insure a motorcycle if title is not in my name
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Asked March 21, 2016
Insurance can be a complicated matter and few consumers truly understand all the rules required to insure a vehicle. In most cases, insurance regulations vary from state-to-state and the rules may even vary from insurance company to insurance company. Therefore, it is important to discuss any questions you have regarding motorcycle insurance with your insurance carrier.
Most insurance companies require that you have an “insurable interest” in the motorcycle, which means you would suffer a financial loss if it were damaged in an accident. Because you don’t own the motorcycle, insurance companies believe that you may not have an incentive to protect it as it really is not yours. In addition, you could purposely destroy the motorcycle in order to collect the insurance if you became angry at the true owner for some reason. Not only is the risk of damage to the motorcycle higher if you don’t own it, insurance companies have experienced motorcycle owners with bad driving records asking friends to take out insurance on their bikes to keep their rates lower.
If you live with the person who owns the motorcycle, such as a parent or sibling, you may be able to add yourself to their policy in order to insure the bike. If you do not live with the owner of the motorcycle, you may be able to find an insurance company that offers an “Owned by Endorsement” option. This may be the only way for you to insure a motorcycle you do not own or that does not belong to someone you live with.
Owned By Endorsement
An Owned by Endorsement clause adds the motorcycle to an insurance policy you already own, such as a car insurance policy. The titled owner is actually added to your insurance policy and are listed as the owner. If something happens to the bike itself, they would receive the proceeds of a claim. The owner of the motorcycle will need to provide information to the insurance company and they must be insurable. If they cannot get insurance on their own, chances are they will be unable to add the Owned by Endorsement to your policy.
Often, coverage under an Owned by Endorsement clause is narrower than full motorcycle insurance. You will need to check with your insurance company to determine if there is coverage for liability and property damage under the clause as not all policies include that coverage. Liability is the portion of insurance that protects your assets in the case of a lawsuit should the owner of the motorcycle have an accident while riding it.
Before agreeing to use a friend’s motorcycle for an extended period or sharing a motorcycle you own with a friend, it is critical that you contact your insurance carrier to determine what coverage you have in order to protect your assets. In most cases, it is better if you purchase the motorcycle from your friend or family member and insure it properly rather than borrowing the bike. Doing so could put you at risk for lawsuits and other potentially financially devastating actions. It could also put your friend or family member at risk if you are the one using the motorcycle.
Answered April 15, 2015 by Anonymous