Can you insure a car in someone else's name in Ontario?

Imagine you borrow a family member or friend's car to get to a last-minute appointment, assuming that their car insurance coverage protects you in case you get involved in a collision. But what if it doesn't? Many Canadians today have questions about whether they can insure a vehicle that isn't in their name, whether to cut down on costs or share a car with another person for convenience. However, Ontario has strict insurance regulations that prevent this, often leading to misunderstandings that can lead to severe financial and legal consequences.

In this guide, we'll take a closer look at car insurance regulations throughout the process, explain the reasoning why you can't insure cars you don't legally own, and give you practical alternatives like non-owner car insurance and the OPCF27 endorsement so you can protect your interests behind the wheel if you ever borrow or rent a car in the future.

Why would someone want to insure someone else's car?

Contrary to what you may believe, there are several valid reasons why someone may try to purchase auto insurance for a vehicle they don't own, including:

You don't own a vehicle

If you do not have a car of your own, there may be times when you need to borrow a vehicle from a friend, family member, or neighbour to attend appointments or run errands. But car insurance follows the vehicle, not the driver. Assuming you're automatically protected is a common misconception.

Parents want to insure a car for their child

A lot of the time, parents look to secure affordable insurance coverage for their children, especially if they're young drivers with minimal driving experience. But, both the registered owner and the name on the car insurance policy must match.

Car sharing with a friend or family member

If two or more individuals share the same car, they may think two separate policies are required. In reality, the registered owner can add the other drivers onto their existing car insurance policy as secondary drivers, while they list themselves as the primary drivers. If you co-own the vehicle, you can purchase an additional insured endorsement. Check out our guide on the difference between additional insured vs. named insured for further clarification.

Gifting a car to someone

Some people may want to gift their used vehicle to someone and maintain their current auto insurance plan to help the recipient save money. However, Ontario laws mandate that all vehicle owner and policyholder names must be an exact match to be in compliance and valid.

You rent cars frequently

Nowadays, people regularly rent cars through traditional car rental agencies, as well as car-sharing services like Communato or Zipcar. When renting standard rental cars, the company will require you to purchase a collision damage waiver in case you cause damage or get into a collision while driving.

Who can purchase car insurance in Ontario?

Anyone with a valid driver's licence can purchase car insurance in Ontario. However, according to Ontario's Financial Services Regulatory Authority (FSRA), car insurance coverage must be purchased by the registered car owner of the vehicle they intend to purchase insurance for.

The logic behind this is simple: Insurance companies generate risk profiles for customers using several factors like driving history, claims history, location, vehicle type, and more to determine insurance premiums. Therefore, if the vehicle registration and insurance policy don't match, insurance companies will view this as a form of insurance fraud, which could lead to criminal charges, fines, and the cancellation of your existing policy.

Hypothetical: Example of how mismatched insurance and registrations can go wrong

A woman from Toronto purchased a vehicle for her nephew, who had just passed his G2 driver's licence test. Because young drivers experience higher insurance rates than those with longer driving records, she purchased a car insurance policy from her insurance company for the second vehicle under her name, to save him money as he's a full-time student. A couple of months later, her nephew is involved in an at-fault accident, which not only causes property damage to his vehicle but also bodily injuries and damage to a third party. When filing an insurance claim under third-party liability with her provider, the insurance company discovered that her nephew was the primary driver, not her. This caused the insurance company to deny her claim due to misrepresentation.

Not only did she have to pay for all repairs, medical bills, legal fees, and other costs out of her pocket, but her insurance provider also cancelled her insurance coverage, making it harder for her to purchase insurance in the future. It's scenarios like these that underscore the risk of not being truthful with your provider by ensuring both names match.

Non-owner car insurance coverage: How it works

If you don't have your own vehicle but still drive often a non-owner auto insurance policy may be the right option for you. Non-owner car insurance is an insurance policy that is specifically designed to provide drivers with liability coverage should they get into a collision while driving. Below we will discuss who would need this type of insurance:

Who needs a non-owner car insurance policy

• People who frequently rent cars.

• Individuals who borrow friends' or family members’ cars regularly.

• Those who use car-sharing services like Zipcar or Communauto.

• Employees who drive company-owned vehicles must carry a valid car insurance policy.

Note that non-owner car insurance only includes liability coverage; it does not include collision insurance or comprehensive coverage. This means any damages that may occur to the rented or borrowed vehicle will need to be paid for out of pocket.

The risk of insuring a vehicle you don't own

As we mentioned, several consequences can occur when neglecting to purchase the proper insurance coverage as a motorist in Ontario, including:

Denied insurance claims

Many insurance companies require policyholders to have what is known as an "insurable interest" in the vehicle the claim is under, which means the policyholder would suffer a financial loss if the vehicle suffered property damage or was stolen. Therefore, if you don't own the car, and damage or losses occur, the insurance provider can deny the claim.

Fraud allegations and legal implications

Willfully lying to your insurance providers about vehicle ownership when purchasing auto insurance is insurance fraud, which is a criminal offence in the Criminal Code of Canada. If an insurer believes fraud has occurred, including:

• The cancellation of your insurance policy.

• Increased insurance premiums in the future.

• Fines or legal action that could lead to a criminal conviction.

Impact on the car owner

If the non-owner of the vehicle gets into an at-fault accident and the insurer discovers that the person insuring it was different, the registered owner could face a loss of coverage and legal consequences as well.

Alternative insurance options for driving someone else's vehicle

Rather than attempting to purchase car insurance for a vehicle you don't own, there are alternatives you may want to consider to ensure you're able to get where you need to go as an insured driver, who's following mandatory coverage regulations in Ontario:

Purchasing liability insurance in Ontario for damage to non-owned vehicles

Ontario has strict rules about car insurance, and one of them is that non-owner insurance policies cannot be purchased as an independent product. Instead, you must have a car insurance policy already in place to add a non-owner policy endorsement such as:

OPCF27: Non-owned auto liability

The OPCF27 endorsement, also known as "Legal Liability For Damage To Non-Owned Automobiles," extends your auto insurance to rental cars or vehicles you may borrow. Key features of this non-owner car insurance endorsement include:

• Extends liability car insurance and accident benefits coverage to non-owned vehicles.

• Covers damage or loss to rented or borrowed vehicles.

• Only applies to personal-use vehicles under 4,500 kilograms.

• Coverage limits range from $25,000 to $50,000.

• Available for all drivers listed on an active car insurance policy.

• Covers rentals for up to 30 days at a time.

The cost of adding a non-owner insurance endorsement to your plan in Ontario averages out to $50 annually, making it a cost-effective alternative for those who rent and borrow cars.

For affordable auto insurance, contact BrokerLink today

At BrokerLink, we help Canadians find affordable insurance coverage. With access to numerous policies from some of Canada's top providers, our insurance brokers can help you shop around, compare quotes, customize your coverage to fit your needs, and answer questions like how to change the name on your car insurance after you’ve gotten married, "does my car insurance and registration address need to match?" And more. Beyond mandatory insurance, we can also help you purchase additional coverage like:

• Accident forgiveness

• Comprehensive coverage

• Collision car coverage

• Roadside assistance

• Coverage for high-risk drivers

• Coverage for multiple vehicles

Contact BrokerLink over the phone to speak with a broker directly or get a non-owner car insurance quote using our online quote tool today!

FAQs about non-owner car insurance

Can I drive a vehicle that is not insured under my name?

Yes, when a driver lends their vehicle, they are also lending their insurance; therefore, the insurance policy on the vehicle would respond for vehicle repairs or injuries.

Can I insure a leased or financed car in someone else's name?

No, only the registered owner of the vehicle, leasing documents, or loan documents can purchase coverage for the vehicle.

Still have questions? Check out our Canada car insurance FAQs for more information.