In most cases, the owner of a vehicle will insure it in his or her name. This is a practical and logical arrangement. It guarantees that the person who has a financial interest in the vehicle's continued existence also enjoys the benefits of its insurance policy. However, there are a few circumstances in which the owner of a vehicle may not wish to insure it in his or her name. This often occurs when the vehicle's owner is not its primary driver and does not wish to pay for insurance coverage on it.
In most jurisdictions, it's perfectly legal for an individual to insure a vehicle in his or her name without actually owning the car. However, some individual insurance companies may refuse to underwrite a policy on a given vehicle without the explicit consent of the vehicle's owner. Some companies may even require that the name on the car's title matches the name on its insurance policy.
This is to minimize the possibility that the vehicle will be used in a manner that violates the terms of its coverage. For instance, a parent might permit his or her college-age daughter to use a family vehicle under the condition that she insure it in her name and pay the policy's monthly premiums. This policy is likely to be initiated in the state in which the car is registered.
However, the girl might travel a significant distance from home to work or attend college without re-insuring the vehicle in her new location. As such, she might implicitly violate the terms of her insurance policy. Rather than deal with this headache, some insurers prefer simply to deny coverage in this situation. Insurers that do choose to initiate coverage in such a situation are likely to charge higher premiums to offset its perceived risk.
It's important to remember that anyone who drives a given vehicle on a regular basis must be listed as a driver on its insurance policy. This is true regardless of the identity of the vehicle's owner. A driver who lives in a household with multiple other licensed adults must be sure to list all of his housemates as active drivers on his vehicle's insurance policy.
In certain situations, auto insurance providers might be more lenient. For instance, insurers often permit business owners to obtain personal insurance policies for vehicles titled to their LLCs or S-corporations without levying penalty premiums.