As you likely know, drivers must have valid auto insurance when they operate their vehicles on public roadways. However, what you may not know is that auto insurance is also essential for other tasks, such as renewing vehicle documents. One of the most common questions that we encounter is: “Do you need proof of insurance to transfer a car title?”
The answer to this common question might surprise you. Below is our detailed guide to the importance of auto insurance as it relates to your car’s title. We also explain how to transfer a vehicle title so that you can ensure that your car is registered properly.
When you transfer a vehicle title into your name, it is essential that you have a high-quality auto policy. We can help you with that by connecting you to one of the best car insurance companies in the industry. Simply enter your zip code into the free rate comparison tool above to get started.
Do You Need Proof of Insurance to Transfer a Car Title?
Whether or not you need proof of insurance to transfer a car will largely depend on your state of residence. Currently, some states require that you have proof of auto insurance to transfer a title into your name. However, others do not.
The type of transfer that you are performing will also determine whether you need auto insurance. For example, most states allow you to sign a title over to another person without requiring auto insurance. The person receiving the title would be responsible for obtaining auto insurance before they operated the vehicle on a public roadway.
On the other hand, your state’s Department of Motor Vehicles (DMV) is likely to be more strict. The DMV will almost certainly require you to show proof of auto insurance before it will provide you with a title. Again, there are a handful of states that are more relaxed, but they are few and far between.
Finance companies and car dealerships have the most stringent auto insurance requirements. These entities will almost always demand that you provide proof of auto insurance before transferring a title to you. This is because auto insurance protects the company’s investment. If you are involved in a crash, the auto insurance policy will pay off your loan. Specifically, dealerships and financial institutions will require that you obtain a full coverage car insurance policy. Again, this is done to ensure that your debt is covered in the event of a vehicle crash.
Regardless of the type of title transfer that you are performing, it is in your best interest to have an auto insurance policy in place. A good auto policy will protect your investment and make sure that you don´t get stuck footing the bill in the event of a traffic accident.
How to Transfer a Vehicle Title
The process for transferring a vehicle title varies slightly from state to state. However, you will usually need to go to the DMV at some point in the process. This applies to private title transfers, not when you work with a dealership. When you purchase a vehicle from a dealership, the dealership will send all of the paperwork to the DMV on your behalf.
During a private title transfer, the seller will sign the title over to the buyer. The seller should also provide the buyer with a bill of sale. If you are the buyer, be sure to obtain a bill of sale that accurately reflects the purchase price. The reason for this is because the amount you paid for the vehicle will be used to calculate the cost of registering and titling the vehicle.
What to Bring to the DMV to Transfer a Car Title
Most DMV offices are extremely busy. If you want to avoid making multiple trips to the DMV, make sure you bring all required documents with you. If a single document is missing, the DMV will not be able to process your transfer request.
When you head to the DMV, you will need:
- Your vehicle identification number (VIN)
- Current odometer reading
- Signed title
- Bill of sale with the purchase price shown
- Your state driver’s license
Many states require that you provide a VIN verification form. This document certifies that the VIN was verified by a reliable third party. The exact process will vary slightly from state to state, but the form can usually be completed by a law enforcement officer or notary public.
For example, the State of Florida requires the VIN verification form. Local law enforcement agencies generally provide this service for free. During the visit, the agency will verify the VIN and also conduct a search for the vehicle information in its database to ensure that the vehicle was not stolen. If possible, buyers should arrange to complete the VIN verification before finalizing the purchase and title transfer.
How Much Does It Cost to Transfer a Car Title?
There is a fee to complete a car title transfer. How much this fee is will fluctuate from state to state. Several states have relatively small fees that are less than $20. However, others have title transfer fees well over $150.
For example, California only charges a $15 title fee. However, there is also a $62 registration fee and an additional $25 to $175 fee for transportation improvements. Florida charges a much higher title fee of $77.25 to $85.25, but it only charges registration fees of $14.50 to $32.50. As you can see, exact fees fluctuate tremendously from state to state.
Our Recommendations for Auto Insurance
Now that we have answered the question of whether you need proof of insurance to transfer a car title, we want to help you find a great policy.
After extensive research, we have ranked the top auto insurance providers in the nation. These providers consistently offer customers a positive experience and good coverage options. Read on to learn more about Progressive and GEICO, or start getting free quotes from top insurers in your area using the rate comparison tool below.
Progressive: Best for High-Risk Drivers
We rated Progressive as the best provider on the market for high-risk drivers. Founded in 1956, Progressive specializes in covering individuals with a less-than-stellar driving history. We gave the insurer an overall score of 9.1 out of 10.0. The company also earned a 9.1 for reputation, a 9.0 for coverage, 9.3 for cost, and 8.9 for customer experience.
Progressive is very popular due to its flexible coverage options and the variety of discounts that it offers. The company reduces your rates for insuring multiple vehicles or multiple drivers and provides loyalty discounts for long-time customers.
GEICO: Best Overall
GEICO was ranked as the best overall insurance provider by our auto insurance experts. The company earned the top score of any company that we reviewed. In addition to receiving a 9.1 out of 10.0 overall rating, GEICO earned a high rating of 9.8 in the industry reputation category. The insurer also received an 8.5 for coverage, 9.4 for cost, and 9.0 for customer experience.
GEICO is known for offering flexible coverage and excellent pricing. The company received an A++ in financial strength from AM Best. GEICO even offers mechanical breakdown coverage and rideshare insurance.
The Detroit Bureau collects data from every major car insurance provider to formulate rankings of the best insurers. Our in-depth rating system takes into account market share, coverage, pricing, customer satisfaction, and ratings from industry experts. Each insurer is given a weighted score in four categories, as well as an overall score out of 10.0.
We recommend auto insurance companies based on these rankings, but we also encourage you to perform your own research and compare quotes to find the best coverage.