Do you need proof of insurance to transfer a car title?

If you need to transfer a car title, you might be wondering if you need proof of insurance to switch the title over. Some states require proof of insurance when signing a title over, but others are more merciful. In most cases, it's up to the new owner to insure the car.

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Mathew B. Sims is Editor-in-Chief and has authored, edited, and contributed to several books. He has been working in the insurance industry ensuring content is accurate for consumers who are searching for the best policies and rates. He has also been featured on sites like UpJourney.

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Written by Mathew B. Sims
Editor-in-Chief Mathew B. Sims

Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent Daniel Walker

UPDATED: May 12, 2022

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Things to Remember

  • Many states allow you to transfer a title without providing proof of insurance
  • It’s good practice to have full coverage since some institutions and states may require insurance when transferring the title
  • Transferring a title can be complicated, so always ask about local regulations first

If you need to complete a car title transfer, you might be wondering if you need insurance to switch the title over. The answer depends on where you live. However, having full coverage has numerous benefits and may be required by other institutions, such as your lender. 

This article will explain the vehicle title transfer process so you know what to expect. 

If you need auto insurance to transfer a title, you should start comparison shopping to get an auto insurance quote.

Do I need insurance to transfer a title?

Each state has its own rules for transferring a title, the legal document showing who owns the vehicle. Some states require proof of auto insurance when signing a title over, but others are more lenient. In most cases, it’s up to the new owner to insure the car when they purchase it or receive it as a gift.

However, even if your state doesn’t require it, other institutions might. Most notably, your lender or car dealership may need you to provide proof of insurance to complete the title transfer.

Regardless of the local regulations, it’s always good to have full coverage on your vehicle to protect your investment and prevent you from being on the hook for excessive bills after an accident. Financing companies and car dealerships can be stringent, requiring a full coverage car insurance policy to cover any expenses caused by an accident.

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How to Transfer a Car Title

Title transfers are never straightforward, regardless of whether you’ve purchased the car, received it as a gift, or sold it to someone. The paperwork can seem daunting, and since the regulations change from state to state, your safest bet would be to check your local requirements through a state agency that processes car titles, often the DMV.

If you are transferring the title to or from a private person, you will still need to go to the DMV to complete the transfer. In a dealership sale, your salesperson will typically send all required paperwork to the local DMV office.

If you’re paying off a loan for your car, your lender is the vehicle’s legal owner. You’ll need to contact them to clarify the process of title transfer.

What documents do I need to take to the DMV to transfer my car title?

Before you head to the DMV to transfer your car title, ensure you have all the necessary documents, including:

  • The vehicle’s current odometer reading
  • The vehicle identification number or VIN: Many states will also require a VIN verification form issued by a reliable third party such as a law enforcement officer or notary public.
  • The bill of sale stating the purchase price: The price of the vehicle is used to calculate the cost of title transfer and vehicle registration.
  • Your driver’s license
  • Proof that the vehicle is in the new owner’s name
  • Proof of insurance (possibly)

You will most likely have to fill out additional paperwork at the DMV office. Once you submit complete documentation, the title transfer gets recorded and you or the new owner will receive a new title.

Proof of ownership can differ depending on the vehicle type and other local regulations. The best thing to do is check with your local DMV before you go in to complete the process.

How can I transfer my vehicle’s title to an auto insurance company?

If you were involved in an accident and your car sustained substantial damage, signing over the title to your car insurance company can help you reduce the impact of a total-loss accident. Assuming you have the proper coverage, you can receive compensation for your damaged vehicle at the market value as determined by the insurance company.

To receive fair compensation, you will need to transfer your title to the insurance company. The process differs for every company, so speaking to an agent is the best first step — the company will provide you with clear instructions on how to proceed.

Transferring a Car Title: What You Need to Remember

Even if your state does not require proof of insurance when transferring a car title, it’s good practice to have it. When signing a title over to an insurance company, get acquainted with your local regulations so you can prepare the necessary documentation ahead of time and avoid delays. Full coverage insurance for your vehicle ensures you’ll have no issues with your title transfer and that you have protection from unexpected expenses and liabilities.

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