Expert: Doctor Settlement - 9/6/2007

Question
I was going to add my girlfriend to my car insurance policy because we moved in together . But My insurance ( AAA ) said if I was not the owner of the vehicle I could not add her vehicle . Is this correct? and if so where do I go to get co registered on the vehicle .  I live in Texas.

Answer
AAA is correct. It is a general tenant of ALL INSURANCE--on buildings, on cars, on someone's life--that the person buying the insurance MUST HAVE AN INSURABLE INTEREST IN THE THING BEING INSURED.  

You can see how that makes sense: just pretend that you could go around insuring things here and there otherwise, and when an "accident" happened to destroy it, you would sit back and collect.  That kind of system just would never work.  Hence, the concept of requiring an insurable interest.

You can add her car to your insurance once you have some legal interest in her car.  I am going to suggest one way below, but first call AAA back and get some info as to any other ways you can acquire an interest sufficient to insure her car.

If that is what you REALLY want to do, then just take her title down to a local agent of the department of licensing and have her sign before the notary there and add your name as a registered co-owner.  

This is no problem with the bank, if someone else holds title as security.  The bank is legal owner, but she is registered owner.  She has the right to transfer her title interest or any part thereof without having to first obtain permission from the lender.  

There are some risks, of course, since your personal assets could be at risk in the event of a serious accident that far exceeds the policy limits.  But in a long term serious relationship, one could understand accepting those risks and putting yourself on her title.

Best wishes,

Dr. Settlement, J.D. (Juris Doctor)
www.SettlementCentral.Com