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Do you need insurance to transfer a car title? It depends on the state. In this article, we’ll discuss the ins and outs of owning, driving, and insuring a vehicle that’s transferring title ownership. We’ll show you the best method to ensure that you can get a title and get insured smoothly. Having the legal and correct types of auto insurance coverage for your vehicle and your financial situation will ultimately save you money.
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“Do I need insurance to change or transfer a car title?” All states have different requirements for title changes and transfers. Although it’s not required in every state, proof of insurance while pursuing a title is a good rule of thumb.
The seller is giving a title to the new owner, who shows the vehicle’s ownership has switched. The new owner, on the other hand, will be responsible for getting the car insured.
Most states are lenient and don’t require you to show proof of insurance when changing or transferring a title.
Do I need proof of insurance for a title transfer?
Sometimes, state law may allow you to title transfer without insurance. However, a finance company or dealership may require you to have auto insurance.
It’s in your best interest to provide proof of insurance even if it’s not required in your state and not the primary policyholder of the auto insurance policy.
Yes. A private car owner can easily sign over a title to someone else. However, it could get complicated if the car is still insured with the previous owner or the owner has to get a title from the Department of Motor Vehicles (DMV).
The private owner will need to provide a title to the buyer within a specific amount of time, depending on the state. If you’re selling a car with a loan, you’ll have to pay off the loan during the sale to get the valid car title.
So, is proof of insurance required to transfer titles? The answer is yes if you’re filing for state records, but no if you’re dealing with a private owner.
Whether you’re gifting a car in West Virginia or Arizona, you have to complete a title transfer at your local DMV. Find your state’s motor vehicle department courtesy of USA.gov.
Watch this video as an example of how you can transfer a title.
The DMV will need a record of ownership if you’re going to register the vehicle with the state. Auto insurance companies will follow up to ensure that you have it to continue driving with insurance.
It’s not likely for a DMV to issue a car title transfer when the other driver doesn’t have a driver’s license or is getting one.
Private owners can hand over a title after the purchase, even if the person doesn’t have a license.
However, the new owner risks getting pulled over for not having auto insurance or a license.
The DMV may also deny you a title because they want to ensure all motorists meet the standards of driving on state roadways. At the very least, you should have a driver’s permit to receive a car title transfer.
No. Although private owners who sell cars may not ask for a license, dealerships require the buyer to have a driver’s license, as it’s too risky to sell a vehicle to an unlicensed driver. No dealership or DMV will contribute to negligence. It’s highly unlikely to own a car under your name without a license.
Putting a car in your name without insurance isn’t likely when pursuing a car title.
“I can transfer a car title without car insurance, why can’t I put my name on it?” you may be asking. Car ownership is private, but the DMV needs a record of ownership. DMV title transfers aren’t possible if the driver doesn’t meet the state minimum requirements for auto insurance.
Dealerships won’t let you drive off the lot unless you have auto insurance in some states. It’s much safer for drivers to get auto insurance if they want to drive without any legal issues.
What about other states? Do you need insurance to change or transfer a car title in California, Florida, Michigan, Pennsylvania, and Texas? The following table has all the answers.
|States||Proof-of-Inusrance Requirements for Title Transfer|
|California||According to the California DMV, proof of auto insurance is not required.|
|Florida||Proof of insurance is required to transfer a title.|
|Michigan||Proof of insurance is not required to transfer a title.|
|Pennsylvania||When you transfer a title, you'll need to show proof of insurance.|
|Texas||You must provide proof of liability insurance if you need a title or registration.|
Three out of the five states we’ve listed above require you to show proof of insurance. It appears proof of insurance falls more so on the buyer than the seller, but it’s partly true for some states. States that require proof of insurance want to know that no one is operating with negligence.
Why would someone sign over a car title to their auto insurance company? If your vehicle is a total loss, you may want to sign over your title to your insurance. Here are a few facts that detail why signing over your title to your auto insurance company will help you after a total loss accident.
|Vehicle Total Loss Facts||From the Experts...|
|Vehicle total loss thresholds vary between 50 and 100% depending on the state||Matthiesen, Wickert, and Lehrer, Attorneys at Law|
|Insurance companies use the actual cash value of your vehicle to determine total loss||Nolo|
|Fair market value is the amount an asset (in this case a car) can be sold for in a traditional sale||National Associate of Insurance Commissioners|
An insurance company will pay out a claim to you for what the vehicle is worth. Be sure to have full coverage auto insurance on your policy.
Liability alone will not provide compensation. Suppose you’re in an accident with another driver who was found to be at-fault. In that case, you could receive compensation from the other party’s auto insurance company for injuries and property damages. With the right coverage, it is much simpler to transfer a car title.
If you’re not at-fault, you will have to file a claim with the other party’s auto insurance company to cover damages.
Total loss damage indicates a claim must replace the value of your vehicle.
If you have the title to your vehicle, you sign it over to the auto insurance company.
Every auto insurance company works differently, but you typically sign over your title by talking to an agent in person, sending it electronically, or sending it by mail. Some adjusters may also be able to come to your home to collect your title.
Some drivers are underinsured, and the cost of damage isn’t covered because the other driver has insufficient coverage limits on their auto insurance policy. Therefore, your auto insurance company will cover the difference through underinsured motorist coverage.
You can supplement your underinsured motorist insurance will collision to ensure that a total loss accident is covered.
Once you can guarantee that your total loss vehicle can be recovered in a claim, sign over your vehicle’s title to the insurance company. You may have to get an application from your local DMV website or location.
The application should contain the signature of the seller(s), lienholders(s), and buyer(s). There may be a transfer fee, depending on the state.
When dealing with vehicle insurance and ownership, it is important to define each step in the process. Some steps are related or interconnected, and some are not.
Here are some important steps and terms to be aware of when you are buying, selling, insuring, or driving a vehicle:
What is a car title? A car title is an important legal document that states who owns a vehicle.
A title is how to show proof of car ownership, but it does not insure the car or license the owner.
If you own the title for your car, you should keep it in a secure location, such as a fire-proof safe or a lockbox.
According to the Digest of Motor Laws of AAA, states require their residents to register their vehicles. Not doing so is illegal. If you have recently moved to a new state, you have a certain amount of time to register your vehicle in your new state. You can learn about the requirements regarding car registration at your state’s DMV website.
When your vehicle is registered, you are paying the applicable state and county taxes and complying with laws that help identify your vehicle.The amount you pay for your car registration will depend on what your state or county values it.
Some areas also require you to have an inspection or emissions test each year or every few years to register your vehicle. You will also need to register your vehicle to get auto insurance.
When registering your vehicle, you will likely need to bring your driver’s license, proof of insurance, and title. However, the documentation and requirements can vary from one state to the next.
A driver’s license is issued by the state you live in. You are not required to have insurance, own a vehicle, or have a registered vehicle to obtain a driver’s license. You will, however, need to show proper identification, such as a birth certificate and proof of residency.
To get a driver’s license, you will also be required to pass a written and practical test, pay a fee, and possibly pass an eye exam. These requirements may vary between states.
Car insurance protects you and other drivers on the road in an accident or another unforeseen event. Almost every state requires its motorists to have some form of car insurance.
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Whether you purchased a vehicle from another party, received one from a relative, or got rid of one, transferring a title involves a lot of paperwork. Since requirements may differ from one state to the next, it is important that you check your local requirements before proceeding.
However, you should be prepared to head to the state agency that processes car titles and registrations. In most areas, this will be your local DMV.
When transferring the title, the person selling the vehicle will need to sign the title over to the buyer. The seller should then provide the buyer with a bill of sale, clearly showing the purchase price.
You should be prepared to take the following with you to the DMV:
As the title strictly deals with who legally owns the vehicle, most states do not require you to prove that you have insurance or that you have a driver’s license.
You can expect to fill out additional paperwork for the title transfer at the DMV. The title transfer will be recorded, and a new title will be reissued in your name.
As overwhelming and confusing as owning and driving a vehicle can be, the title is one of the most straightforward parts.
Since the title is simply a document proving who has legal ownership of the vehicle, drivers are not required to have or show proof of car insurance in most states, to transfer a car’s title.
Find out why using an online auto insurance calculator should always be part of your shopping. A calculator or comparison tool will ensure that you are getting the best premium available to you.
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There’s usually a fee you have to pay, though could be as low as $15. It varies for each state.
You may be able to transfer a car title online with your local DMV. This option has become prevalent in certain counties and states since the COVID-19 pandemic began. If not, you’ll have to go to the DMV with all the requested information to transfer a title.
Yes. Minnesota passed a law in 2016 that says the transfer of ownership must include proof of insurance.
The seller must notarize the title. Both buyer and seller must confirm and sign the title in person.
To ensure you’re not financially liable for a car you sold, turn in your license plates before selling your vehicle. This indicates that the car isn’t registered to you anymore. If a buyer doesn’t sign the title, they’ll still be responsible even though they didn’t sign it.
Some states will allow you to apply for a duplicate title by mail, online, and visiting your local DMV. DMV officials will walk you through the items you need, which likely be driver’s license, proof of insurance, VIN, etc.
When you have ownership of the vehicle, you can complete a title certificate. Once the title certificate has been filled out, take it to the DMV, and transfer the vehicle’s ownership to a family member.
Florida and Texas require that you show proof of insurance when you transfer a title, while California and Michigan don’t require proof of insurance.
If you’re the owner of a vehicle and want to transfer ownership, you’ll have to sign the title to a buyer. On the back of the title, write or type in odometer, VIN, the date you sold the car, and the sales price. You can get title transfer forms from your local DMV.
The standard time it takes to receive your title is 15 to 30 days.
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