Do I Need Proof of Insurance to Transfer a Title?

Call your state's motor vehicle department or visit its website to find out about coverage and state requirements. Some states do not require proof of coverage if for nonregistered vehicles, meaning you do not have to insure the car until you plan to drive it. You may also find that a title is not enough to transfer a vehicle's title into your name. Some states require notarized signatures, a bill of sale or proof of emissions testing.

Most states require liability coverage to protect drivers, with exception of New Hampshire and Wisconsin. Even so, New Hampshire requires proof of financial responsibility, or proof that you can pay for damages yourself in the event of an accident. Otherwise, expect to show proof of insurance to meet your state-required bodily injury and property damage coverage if your state requires it. This policy ensures you can pay for damages you cause if you are in an at-fault accident.

If you determine you need proof of insurance to transfer your title, call your insurance agent to add the car to your policy. Your insurance agent knows your state's requirements and can provide you with proper documentation. Your proof of insurance should list your name (as it appears on your license), effective dates of policy coverage, your insurance company's name, insurance provider code and relevant vehicle information, such as year, make, model and vehicle identification number.

If you must insure your car to transfer the title, consider increasing your insurance limits for bodily injury and property damage coverage. Although you may never need your insurance, you can benefit financially from increasing your coverage to protect your finances if an accident should occur. State liability limits are often very low. If you should have a multi-vehicle accident or cause significant injury to other people, damages are likely to exceed your state-required minimums. If this happens, you become responsible for the cost of damages that exceed your policy pay out.