The following is an exported forum post from our discontinued forum. If you would like to reply to this old forum post, please post a comment below.
I’ve bought auto insurance many times, but never have I been asked to show them the title of the car I want to insure. Are they trying to scam me?
Is there any reason why a car insurance company would ever need to see the title? I’m kinda iffy about letting them see it…
Some insurance companies may ask to see the title when you’re buying insurance. The reason is simple: the insurance company wants to verify that you are the legitimate, registered owner of the vehicle you’re trying to insure.
It’s rare for an insurance company to ask to see a title – but it’s not that unusual. Some insurance companies engage in the practice, while others do not.
If the car insurance company asks to see your title, then they’re simply verifying that the car belongs to you. It’s possible they do this with every customer. Or, it’s also possible they doubt your ownership of the vehicle – say, if you stole it or acquired it from some private seller in a shady transaction.
If you feel uncomfortable revealing the title to your insurance company, then switch to another insurance company. There are plenty of insurance companies that will not ask to see your title. As you mentioned in your post, you have purchased car insurance many times and never had to show your title.
Anyways – your car insurance company isn’t trying to scam you. Their insurance procedures are just a little different from the procedures of other companies.
It’s a question of insurable interest
You can buy non-owner’s car insurance on vehicles that you do not technically own. However, most car insurance policies are designed to cover cars you personally own.
If the insurance company asks to see your title, then they’re simply verifying you have an insurable interest in the vehicle.
The insurance company is protecting both your interests and their own: settlements can get complicated in situations where insurable interest is up for debate.
Protecting lienholders’ interests
In other cases, the insurance company wants to see your title because they believe there’s a lien on the vehicle. If a lien is present on the vehicle but not listed on the policy, then it understandably complicates the car insurance claims process.
In this situation, the car insurance company may ask to see the title to protect the lienholder’s interest. The car insurance company may ask every policyholder for a title. Or, the insurance company might have reason to believe there’s a lien on your vehicle.
Verifying garage location of your vehicle
Insurance companies may also ask to see the title of your vehicle to verify the location of the vehicle at night. Based on where your vehicle is parked at night, insurance premiums can change significantly.
Some people live in a rough neighborhood, for example, filled with break-ins, vandalism, car thefts, and accident claims. If you input the ZIP code for this neighborhood into a car insurance comparison form, then you might pay twice as much for car insurance as you would if you put your parents’ address in a safer part of town.
You must list the ‘garaging’ location of your vehicle accurately on your car insurance policy. If the insurance company has reason to believe you’re lying about the garaging location, then they may ask to see your title.
Car insurance companies may ask to see your title after an accident
It’s rare for car insurance companies to request to see your title before getting car insurance. In most cases, a car insurance company will only ask to see your title after a car accident.
A car insurance company may ask to see your title after a vehicle is totaled or almost totaled, for example.
Total loss thresholds can be anywhere from 50% to 100% of the vehicle’s current value, depending on your state.
Your insurance company isn’t scamming you
Ultimately, the car insurance company isn’t scamming you: the car insurance company is simply doing its due diligence. It’s possible the car insurance company thinks you’re lying, for example. Or, they could ask for a title from every customer. Otherwise, the only situation where a car insurance company is going to ask for your title is after you make a claim for a totaled or near-totaled vehicle.
They usually only insure cars that BELONG TO YOU. SHowing them the title is really the only way you can prove that the car is yours… With that said, I think theres tons of insurance companies that dont need to see the title. If you don’t feeel comfortable with it, just go and use someone else.