You need reliable transportation but money is tight right now. Buying a car is out of the question but it would be possible to manage the monthly amount associated with a car lease. The only problem is that managing the insurance without some help would be impossible. Can a friend or relative secure the insurance for the vehicle even if he or she will not be taking possession of the vehicle? Depending on several factors, the answer could be yes or no.
The Role of Insurable Interest
One of the aspects that must be considered is the concept of insurable interest. This is a term used to describe the amount of interest that the person paying the insurance has in the vehicle. When you are leasing a car in your name and will be the one who drives it every day, your interest is clear and uncomplicated. If another party is involved, the situation changes.
You’ll find that many auto insurance companies will not consider providing the coverage at all. According to their terms, the person securing the coverage must be listed as the principle operator and be in a position to prove that is true. Having you listed as an authorized driver could make it possible to secure the policy, but think of what could happen if an accident takes place and it comes to light that you were the only one using the car all this time. Since you will be the one doing the driving, there could be serious legal issues if it comes out that the two of you misrepresented the situation to the insurance provider.
There are a few auto insurance companies that do offer coverage for leased vehicles and allow a third party to purchase the coverage. There will still be the need to be clear on who will maintain physical possession of the car and who will be doing all or most of the driving. One approach that may work is by including you as an authorized operator on the insurance policy. Even then, expect the provider to require some idea of how often you will have control of the vehicle versus the individual who is buying the plan.
What Does the Leasing Agent Have to Say?
Even is you can find an auto insurance company willing to provide coverage, there is still the matter of whether a car leasing company will approve such an arrangement. The only way to know for sure is to ask an agent and read through the lease agreement carefully. What you may find is that this approach is not acceptable at all, or there may be specific restrictions on who can secure the insurance other than the person leasing the vehicle.
For example, the provisions may allow a third party to purchase the insurance but it must be a close relative. This would mean that the parent of an adult child might be eligible to secure the insurance while the child takes care of the other lease terms and conditions. The provisions may be a little broader and allow another blood relative who does not meet the dealer’s definition of close to provide the insurance. There may even be provisions that all a domestic partner to secure the insurance while the lease remains in your name.
While your options for securing a car lease and having someone else take care of the insurance are limited, the only way to know for sure is ask the right questions. Read the lease terms and provisions carefully and find out what is required in the way of insurance, including who may provide it. Assuming a third party can secure the coverage for you, the next step is to locate a provider who is willing to extend the coverage even though you are not buying the plan yourself.