Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

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Reviewed by Leslie Kasperowicz
Farmers Insurance CSR 4 Years

UPDATED: Aug 20, 2020

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Here's what you need to know...

  • Having a cosigner can help you get approved for a car loan and pay a lower interest rate
  • You should check with your lender, your state, and your car insurance company to find out if you need to add your cosigner to your insurance policy
  • Anyone who drives your car frequently should be on your car insurance policy
  • It is also important to make sure you have the legally required coverage in your state, as well as any other coverage you may need

Does my cosigner have to be on my car insurance policy? That question leads into several more, including that of who’s covered and who’s not on your car insurance policy.

Many Americans are not the sole signers on their car loan agreements. This can happen if you purchase a car with your spouse, your parent, or a business partner. While it’s often done out of convenience, such as in the instance of having your husband or wife on your car title with you, it’s also done out of necessity.

Having a cosigner on your car loan can help you qualify for a loan and bring down your interest rate. This is the only way that many Americans can qualify and afford to get a car. If you need help affording your car insurance, consider using an online price comparison tool.

Such tools make it simple for you to compare dozens of car insurance companies and policies to be sure you’re getting the best rates possible. This makes car ownership more affordable. Compare rates now by using our FREE tool above, then read on to learn if a co-signer has to be on your insurance policy.

What does it mean to have someone cosign?

Having someone cosign on your loan can have many benefits, but also some drawbacks. If someone is willing to cosign on a car loan with you and their credit is better than yours, this will likely increase the chances that you’ll be approved for the loan and that you’ll get a decent interest rate. For the cosigner, it means that if you fail to make the payments, they’re also financially responsible for the debt.

If you don’t make the payments on time, or at all, it can eventually affect their credit rating as well. Always keep in mind the consequences for late payment in car insurance.

On the other hand, if you make your payments on time, this type of situation could increase the credit scores of both signers of the auto loan. When the loan has been satisfied, the loan company will release the title. If you have a cosigner on your auto loan, the title will be made out in both your name and the name of the cosigner. Getting this changed could involve additional fees and time on your part.

Learn about car insurance policies and cosigners in the section below.

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Is my cosigner required to also be on my car insurance policy?

The answer to this question may vary from one state to the next and from one insurance company to the next. However, if you have a cosigner, the title for your car is in the possession of your lender. This means that since technically your lender still owns your vehicle, the most important factor to your insurance company is who is driving the vehicle.

If your cosigner will never or rarely drive the vehicle, they likely do not need to be included in the insurance policy. However, if there’s a chance that the person who cosigned your loan will be occasionally or frequently driving the vehicle, you should probably add them to your car insurance policy. Will insurance cover someone else driving my car? It depends on what type of coverage you have.

You should check with your local DMV, your lender, and your car insurance company to see what is specifically required in your circumstances.

Some lenders require a copy of the car insurance certificate with both signers listed. You’ll want to make sure you’re in compliance with any state laws and abiding by your loan contract when it comes to adding your cosigner to your insurance. It’s probably a good idea to ask your insurance company about car insurance with two names on the title.

What else do I need to know about insuring my vehicle?

If you have a loan on your car, your lender will likely require you to carry auto insurance above and beyond what is legally required of you. Do all states require auto insurance? While car insurance laws will vary from one state to the next, most states require all drivers to at least have liability coverage.

This means that if you’re in an accident, your insurance company will pay for damages caused to other parties and their property, including their vehicle. However, your lender will usually require you to add additional coverages to your liability policy, including:

  • Collision Coverage – This part of your auto policy protects you if you have an accident with another vehicle. It pays to repair or replace your vehicle. You can choose your deductible amount and policy limits.
  • Comprehensive Coverage – Comprehensive coverage applies to damages your car incurs that are not sustained as a result of colliding with another vehicle. Comprehensive coverage will cover damages related to hail or other weather events, fires, vandalism, theft, or hitting wildlife or other objects. With comprehensive, you can also choose your deductible and the limits.

Drivers should check with their lenders or review their lending agreements to find out if they are required to have comprehensive and collision coverage. Even if you’re not required to have it, or even if you own your vehicle outright, both types of coverage are wise options to consider.

Keep in mind that lower deductibles will mean higher premiums as will higher policy limits.

Before deciding on either one of these, car owners should determine how much they would be able to pay out-of-pocket if an accident or unforeseen event were to occur. Industry experts say that a $500 deductible is common for both collision and comprehensive coverage.

Average insurance rates can differ greatly depending on many factors, including the company you go with. For example, below is a chart of average insurance rates by company in Tacoma, WA.

Tacoma, WA Average Annual Auto Insurance Rates by Company
CompaniesAverage Annual Rates in Tacoma, WA
Nationwide$2,620.93
USAA$2,647.08
Geico$3,092.98
State Farm$3,405.19
Farmers$3,794.04
Progressive$3,851.48
American Family$4,310.19
Allstate$4,662.26
Liberty Mutual$4,982.08
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As you can see, there are large differences in insurance rates between companies. Easily compare car insurance rates from different companies by using our helpful tool below.

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What is gap insurance?

If you lease your vehicle or are still paying your lender, you may want to also consider gap insurance. When your car is damaged and the costs to repair it meet or exceed what your car’s fair market value is, your insurance company will likely pay you the fair market value and move on. However, oftentimes when this happens, the fair market value is less than what is still owed on the loan or the lease for the car.

This leaves a gap between how much the owner of the vehicle gets from the insurance company and how much still needs to be paid on the loan or lease. Gap insurance fills the financial gap.

Take a look at this video for more on gap insurance.

This type of insurance is sometimes required by leasing companies and lenders.

FREE Car Insurance Comparison

Enter your ZIP code below to view companies that have cheap auto insurance rates.

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Other Types of Car Insurance

In addition to the aforementioned insurance types, you may also be required, or want to carry:

  • Med Pay
  • Personal Injury Protection
  • Rental Car Reimbursement
  • Roadside Assistance

It’s important to make sure you have added your cosigner to your car insurance if required by your lender, or your car insurance company, or your state. It’s also important to make sure you have the right amount of auto insurance coverage for your needs. If you have any additional questions, check out the frequently asked questions below.

If you feel like you’re skimping on the coverage you need in order to afford your auto insurance policy, it may be time to comparison shop. Now that you know if your cosigner has to be on your car insurance policy, get instant car insurance rates now by entering your ZIP code in our FREE tool below.

Frequently Asked Questions: Does my cosigner have to be on my car insurance policy?

We hope we’ve covered everything about cosigner and co-owner car insurance, but just in case, check out these common questions below.

#1 – Does the cosigner have to be on the car title?

If I cosign for a car will my name be on the title? In most cases, a cosigner isn’t required to be on the title. Additionally, if you’re wondering, “Can a cosigner register a car?” No, the cosigner is not the vehicle’s main owner; the driver should be the one to register it.

#2 – Can a cosigner put insurance in their name?

Yes.

#3 – What qualifies a cosigner?

This depends on the car insurance company you go with, however, a good credit record is usually required. Many first-time car buyers will get their parents to co-sign car insurance.

#4 – Can I be taken off as a cosigner?

There are several ways a cosigner can remove themselves from a loan, depending on the lender. One great way is by refinancing the loan in question.

#5 – Can a cosigner be liable for an accident?

If you’re wondering, “Can my cosigner insure my car?”, the answer is “yes,” since they are technically the co-owner of the vehicle. However, this means that the cosigner may be liable for an accident.