Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in...

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Reviewed by Jeffrey Johnson
Insurance Lawyer

UPDATED: Jul 14, 2021

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  • A car title is a legal document that proves you own your car
  • You do not have to hold the title to get insurance
  • Look at your options and shop and compare to save money on your policy

A common misconception is that you have to own your car to get insurance.

In fact, there are far more people who do not own their car who have insurance than those who don’t. Finance companies often require insurance as a means of securing their property until you pay it off.

Compare car insurance options today using our free quote box above.

What is a car title?

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Let’s start with a definition of a car title. A vehicle title is a piece of legal documentation that shows proof of ownership. It is simply a document that verifies that you own your vehicle and do not owe any payments on it.

A car title means that you completely own your vehicle. But, if you own your car outright, you may sell your car to anyone you choose either with cash or by working out a personal agreement with the buyer.

Also, you can purchase a new car by taking your car to a dealership and making a trade-in deal with them. They may give you a good deal toward a new car if you have done a good job of caring for your car while it was in your care.

In this way, you can use the money that you paid for the car to help you save money on a new one.

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Titles and Car Insurance: The Facts

Regarding insurance, it does not matter whether you own the title or not. You may obtain auto insurance at any time as long as you either own or are paying on your vehicle at the time of your application.

During the insurance application process, the online representative or agent will ask you if you own the title or if you are under a car loan that you are paying back.

If you tell them that you have a car loan, then you will be required to show them which loan or finance company has your car note.

The car finance company will also want to know which company you have your insurance with. They can usually find this information themselves, but it will go in your favor to calling them and informing them once you change insurance.

How to Obtain New Car Insurance

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When you purchase a new car, you will need to call your insurance company and inform them about your new vehicle. They will want to know the following information:

  • Make/model of car  Insurance companies will be required to document the type of car you have including the make and model so that they will have it on record. If you have purchased a newer car than you had previously, you can expect your premiums to go up a bit.
  • Date of purchase  The date of purchase is another fact that your insurer may want to document for tracking purposes later.
  • VIN  The vehicle identification number is important because it provides the tracking number of your vehicle that is essential for identifying your car among thousands of other vehicles on the road.
  • Other related information  If you have any new add-ons or accessories to your vehicle, you will need to inform your insurance company about these.

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Requirement to Report Changes

There is a law that requires you to inform your car insurance agent in the event of any changes.

These changes can include changes in your vehicle type, changes in ownership of your vehicle, and title status.

You do not have to present a copy of the title, but it is a good idea to report to the insurance agency that you have paid off your car once you have the title so that they can note that you fully own the vehicle.

You have full responsibility of the ownership of your car and it would not be tied up in any legal situations if you had an accident, theft, or other situation involving your vehicle.

Being the owner takes out the middleman in any insurance disputes or settlements so that the insurance company would only deal with you regarding any disputes involving damages or loss to your vehicle.

Keeping your insurance company informed about any changes in status regarding your title and your vehicle will ensure that you are on the same page regarding the ownership status.

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How to Save Money on Car Insurance

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Whether you own your car and have the title or you are still paying it out via a finance company, there are some specific ways that you may be able to save money on your policy. Below are some of the best ways to do this.

  • Purchase a lower-priced or older vehicle  If you are shopping for a car, you may want to consider purchasing a slightly older vehicle. Even purchasing car that is five years of age or older may save you thousands in car insurance over the course of a few years.
  • Work on your credit rating  Your credit rating is one of the factors that insurance companies use to decide on your premium. If your credit rating is good, your premiums will be lower.
  • Look for discounts  Insurance discounts may save you lots of money on your car insurance. You may qualify for low mileage, government employee, or student discounts, to name a few.
  • Keep your driving record clean  The most important factor in deciding your car insurance premium if your driving record. By keeping this record in good shape, you will get the best rates possible.

To save money on car insurance, you should start with comparison shopping. Shop and compare different companies, policies, and options to get the best rates right here right now.