Does the buyer of the car have to be the one with insurance?

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Things to remember...
  • Most people lease or finance their car these days
  • Regardless of your method of payment, you are required by law to have auto insurance in all states except for New Hampshire
  • Liability insurance will protect you and your assets in an accident where you’re found to be at fault

This is definitely one of the more complicated auto insurance questions you could ask. The answer depends on where you live and how you’re planning to purchase your car.

But for most cases, the answer will be “yes” – the buyer and the insured have to be the same person.

Most people lease or finance their car these days. If that’s your plan too, the dealer and any reputable used car salesperson will require you to show proof of insurance before you even can buy the car.

Get free auto insurance quotes by entering your zip code in the free tool below. Be prepared before you shop for your dream car!

If I purchase a new car with cash, will I still need insurance?

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Regardless of your method of payment, you are required by law to have auto insurance in all states except for New Hampshire. Get insurance before you buy the car so that you’re covered the minute you drive off the lot at the dealership.

People do, in fact, get into fender benders or even more severe car accidents on their way home with a new car. Protect yourself from this unlucky scenario.

If you don’t have insurance yet, pay to get the car towed to your home and get insurance as soon as you can. You will not be able to operate it until it is insured.

If you happen to live in New Hampshire, the only state that doesn’t require insurance, it’s still a good idea to buy liability insurance.

Liability insurance will protect you and your assets in an accident where you’re found to be at fault (whether you think you are or not) and must pay for damages or injuries sustained by the other person.

While saving up the cash for that new car, save up the amount needed for the insurance too.

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What if my parents offer to put my car on their insurance policy?

Parents can often be generous and well-intentioned, but they don’t always know the rules. Have them check with their particular auto insurance company to be sure, but almost all insurance companies want the registrant of the car to match up with the owner of the insurance policy.

The reason that parents are able to put their children on their auto insurance when they’re just starting to drive is that the kids are driving the family car.

Auto insurance policies insure the car, not the driver. When you were a teenager and your parents added you to their policy, they were simply adding another driver to their insured car.

It’s not the same as adding another car, with a different owner, to their policy. Their insurance company will likely deny the request unless you sign over the car’s title to your parents.

Will I still need auto insurance if I decide to just borrow or rent a car when I need one?

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There are many financial advantages to not owning a car, including the savings on annual maintenance alone. However, if you plan to borrow your best friend’s car or rent one regularly, then you should look into purchasing a non-owners auto insurance policy.

A non-owners insurance policy will provide liability protection, but not the other coverage typically part of an auto insurance policy, such as comprehensive and collision.

It may also offer additional protection to you should an accident happen while you’re driving your friend or relative’s car.

Their insurance policy would cover the car, but if their liability coverage was low, you’ll be glad to have your nonowners policy protecting you against any lawsuits stemming from the accident.

If you’re renting a vehicle, the rental agency will offer a collision damage waiver, which will cover the car in an accident.

Your credit card company likely offers the same coverage, but you must decline the rental agency’s waiver and pay for the rental with that same credit card that offers the coverage.

Check with your credit card provider first. Their typical coverage kicks in after all of your other insurance has been exhausted, and covers both theft and damage.

Insurance coverage is easy to find! Simply enter your zip code in the box below and choose from free auto insurance quotes that fit your needs, now!

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