Do co-signers have to be on the auto insurance policy?

Your co-signer only has to be on your auto insurance policy if (1) their name is on the car's title, (2) you live together, or (3) they drive the car regularly. You are not obligated to pay for auto insurance coverage of the co-signer.

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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 and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Aug 19, 2021

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Things to remember...

  • If your credit is not strong enough to get an auto loan or attract lower interest rates, you can seek a co-signer to help you out
  • A co-signer will obligate himself/herself to pay the car loan if you fail to do so
  • A co-signer doesn’t have to be on the insurance policy for the car unless he/she is named on the title
  • Having a co-signer does not affect your auto insurance rates

When you co-sign for someone, you become partly responsible for financing the auto loan, but there are so many questions.

Can my co-signer insure my car? How long is the co-signer responsible? How do I protect myself from co-signing a car?

As such, you should follow up and ensure that the vehicle is fully insured, especially if the title lists you as a co-owner. However, you are not required to be on the auto insurance policy, and you probably don’t need coverage.

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Protect Yourself

As a co-signer, you should understand that when it comes to the payment of the car, you are just as responsible. If the vehicle’s primary owner fails to meet his financial obligation towards the lender, you stand to be sued.

Protect yourself from legal charges by creating a clause (in the original contract) giving you the authority to take possession of the vehicle without notice should the primary owner fail to meet his financial obligation.

As stated earlier, as the co-signer, you are not required to be a part of the insurance policy. The primary reason of the co-signature is financial responsibility for the repayment of the car loan.

However, you should make sure that the vehicle’s insurance payments are observed. You can do this by requesting the policyholder to add you as an insured and so that you can always be notified of any cancellations or changes to the policy.

The best way to get favorable rates regardless of whether you are part of the policy or not is to compare as many quotes as you can. The primary owner’s driving record and a host of other factors determine auto insurance rates.

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The Lender Is the Lien Holder

The agreement between the co-signer and the primary car owner is legally binding. Technically, co-signing affects only loan repayment. If the vehicle’s insurance is in your name alone, you are the sole driver and the sole car owner.

You are solely responsible for all the costs that may arise from insuring the vehicle.

The lender, according to the policy, is the lien holder. In most cases, the lien holder will require the primary owner to carry both comprehensive and collision coverage if there’s still some loan balance owed.

The Difference between Co-Signing and Co-Owning

Unless his or her name appears on the registration or title of the car, the co-signer does not essentially own part of the car.

When it comes to auto insurance, it may be a good idea to add the co-signer as one of the insured parties even if his/her name does not appear on the vehicle title.

Adding the co-signer to your policy is a precautionary move against an accident that results in damage to property or bodily injuries and subsequently leads to a lawsuit. The co-signer becomes a co-owner if his/her names appear on the vehicle registration documents as well as the title.

A co-signer who is not a co-owner is referred to as a co-borrower.

Check With Local DMV Offices for Lending Requirements

If you choose to use a co-signer, make sure that you check with your state’s DMV office for the paperwork and obligations of each party.

Some auto insurance providers may ask you to provide proof of coverage, fully signed by both parties. Otherwise, you can choose how you want to go about the process.

If your co-signer happens to be one of your parents, and you live under the same roof, you can add them as additional insured but not named drivers. There are no extra charges.

Your auto insurer will provide relevant advice under each unique situation as long as you understand the difference between a co-owner and a co-borrower.

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Situations Where Co-Signers Should Be Part of the Insurance Policy

As a co-signer, have a financial responsibility to the lender if the primary owner fails to pay the loan. You should, therefore, ensure that nothing happens to the vehicle until the loan is fully paid.

There are certain scenarios and reasons why you may need to be included in the vehicles insurance policy.

Take a look:

  • Vicarious Liability
  • Living Situation
  • Drivers of the vehicle

Vicarious Liability

Vicarious liability means that by being a co-owner, you are partly responsible for any damages resulting from the driver’s actions. This means that in the event of an accident, you, the co-signer, can be liabile for an accident and as such, you could be sued.

Therefore, you have a duty to ensure the car is continually and adequately covered. For easier monitoring, you can be included as an insured in the vehicle’s policy.

– If The Co-Signer and the Primary Owner Live Under the Same Roof

Most auto insurance providers give additional drivers who are members of the same household similar protection they give to the primary drivers. Include yourself in the policy to get to enjoy this coverage extension.

The only downside is the potential increase in the cost of the policy.

– If You Drive the Co-Signed Car on a Regular Basis

If you co-signed a vehicle and you drive it on a regular basis, you can bring down the cost of insurance by being in the policy. This may be especially useful if the primary car owner is a new driver hence inexperienced.

He or she will attract higher rates, but the addition of another experienced driver will lead to a significant drop in the cost of insurance.

Auto insurers and lenders do not require co-signers to be a part of the vehicle’s insurance policy, but sometimes, the situation may call for it.

Whether it is for the purpose of the reduction of insurance costs or to monitor payments and changes to the policy, a co-signers inclusion in the policy will have a positive impact. Always shop around and compare quotes from various insurers to score a better auto insurance deal.

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