What is the potential liability of a person who insures someone else’s car?

UPDATED: Nov 11, 2011

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What is the potential liability of a person who insures someone else’s car?

My friend is asking me to insure his car because he doesn’t have a US issued driving license. He is an undocumented alien. All he has is an international license which I don’t know if he can drive with. If I insure his car and he got into an accident, will the insurance company deny the claim and then I’d be liable? Does the policy insure the driver or the car?

Asked on November 11, 2011 under Insurance Law, Massachusetts


M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

The short answer here is that you can insure the vehicle of another under certain conditions and generally only if you have the owner’s permission as well as an insurable interest in that vehicle. In order to purchase insurance for something such as property, the person buying the insurance must have some financial interest in it. And generally too insurance insures the car.  But the long answer here is I would not think that the scenario as you have paid it out here is a good one to purchase insurance.  I think that the insurance company will have a lot of ammunition to disclaim coverage - that is what you meant by denying the claim - and yes, that could leave you on the hook.  Good luck. 

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