Transferring Car Title: Do I need insurance?

Check with your local DMV first to see if you need insurance before transferring a car title.

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UPDATED: Jun 20, 2022

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Written By: Laura BerryReviewed By: Joel OhmanUPDATED: Jun 20, 2022Fact Checked

Here's what you need to know...

  • Some states or counties may require that you have liability insurance in place before you transfer a title following a private sale
  • Many jurisdictions do not have this rule in place, so you should check with your DMV to confirm
  • Dealerships and lien holders may insist that you have insurance first

If you are buying or selling a car, you need to cover certain formalities. For example, you will need to record the change of ownership and may want to know whether you need proof of insurance when transferring a car title. As this is an important question, we’ve done some research for you and provided you with answers below.

Do you need car insurance when transferring a car title?

Some states require that you show proof of liability insurance before you can transfer a car title. This is not uniform, and you should check with your local DMV to see what is necessary. 

If you buy the vehicle from a dealership, it may also insist that you have liability insurance before taking control. If you are working with a finance company, it will insist that you have collision and comprehensive coverage as well before you can take control.

What’s the difference between title and registration?

Remember that there’s a difference between a car title and a registration document. The title is proof that you are the vehicle’s legal owner, while the registration designates certain responsibilities to you. It establishes a link between you as the owner or user and the car itself. 

Most states will insist that you have a minimum amount of liability insurance in place before they issue a registration document.

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Do some places insist on auto insurance?

Some jurisdictions (such as this county in Texas) require that you show proof of liability insurance before they will allow a title transfer procedure to go ahead in a private sale. In this case, the insurance must be in the buyer’s name listed on the title application. The buyer must complete the process within 30 days of purchase or face a financial penalty.

What details do you need to transfer a title?

If you buy a vehicle from a dealership, it will generally handle the title paperwork. Otherwise, you may need to get the seller to sign the title over to your name, releasing ownership. You will then need to take the title to your state DMV. There, you will have to show a current photo identification and possibly some other information, like a vehicle inspection report, depending upon the state or county’s requirements.

Can I transfer a car title online?

Many jurisdictions allow you to transfer a car title over the internet. In California, you will need an application form, the signatures of the seller, the lien holder (if any), and the buyer, together with a transfer fee. In California, you do not need to provide proof of insurance at this point.

Is a title transfer possible for an uninsured driver?

It’s essential to be clear about definitions. Most states insist that an owner carries liability insurance whenever they register a vehicle. Some of these jurisdictions insist on seeing proof of insurance before transferring the title. 

You are not allowed to drive the car in question to a DMV office to transfer the title if you do not have insurance in place. Almost all states insist that you have liability insurance before driving the vehicle on a public road. 

Checking the Title Details

When buying a vehicle in a private sale, check the title carefully to ensure that there are no liens in place that may affect your ownership interest. You should verify the information on the certificate of title, including the odometer listing.

The Bottom Line on Needing Car Insurance to Transfer a Title

You should check with your jurisdiction for the specific requirements. For a private sale, some places need to see proof of liability insurance before transferring the title, while others will not. If you buy a vehicle from a dealership, it may insist that you have liability insurance in place before transferring the title. If you have a finance lien, that company will likely require that you have comprehensive or collision coverage in place as well.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Written by Laura Berry
Former Insurance Agent Laura Berry

Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP® Joel Ohman

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