Is there title insurance for automobile purchases?
Yes, there are title insurance products that cover automobile purchases, particularly the used or second hand ones.
Title insurance for cars is a fairly new product and has been in the market for only a few years. This product is based on the concept of protecting a buyer of a used car from financial losses because the buyer was not able to make a more informed decision due to a defect in the vehicle-history report.
Similar to title insurance for real estate property, vehicle title insurance protects the insured against financial losses he may incur due to:
- Fraud in the transfer of vehicle ownership or in the transfer of the title (such as title washing or odometer rollbacks)
- Inaccurate information given as to the vehicle's title history. This includes any information about the title, as well as data provided by motor vehicle departments.
- Change in the seller's marital status, which is not reflected in the title of the car
- Legal expenses to defend against liens attached to the vehicle or against ownership claims from other parties
- Frame damage or water damage or any other damage that turns the automobile into being declared a "lemon". Commonly, the information did not show in any AutoCheck report, or a vehicle-history report provided by the state's Department of Motor Vehicles.
- Errors or delays in updating the vehicle-history report
Usually the title insurance also comes with a vehicle history report, similar to a title commitment provided for real estate properties. The policy covers the title until such a time that the owner decides to sell it or to transfer the title to another party.
If you are buying a car that does not qualify for a certified pre-owned vehicle program given by the car manufacturer, we recommend that you get title insurance for the car you are planning to buy. You should also consider buying title insurance if the car you are buying has come from a different state, particularly a state that is known to be flood prone.
The insurance cover, however, does not protect against inaccuracies on information provided by car auctions, as it is hard to check the accuracy of the information given.
| Not a bit | Very useful |
- How to lower car insurance rates?
- Are car insurance payments taxable?
- Does car insurance follow the car or the driver?
- Does car insurance policy cover items stolen from the car?
- How do points on driver's license affect car insurance rates?
- How does credit card rental car insurance work?
- If we have car insurance and it covers anyone with permission why list children?
- Is car insurance cheaper if you buy vs. lease?
- Is car insurance rate affected by credit rating?
- What criteria place a car in the sports car insurance bracket?
- What is car insurance discount for defensive driver training?
- Can you get auto insurance with just a learner's permit?
- Will a speeding ticket from another state affect your auto insurance?
- How do you find insurance records from a previous owner of a car?
- Are you covered by a family member's insurance when driving their car?
- If you are charged with a DUI how does it affect your auto insurance?
- Does an auto insurance policy have to be in the same name as the car loan?
- How is PLPD insurance different from no-fault or full coverage auto insurance?
- What is the difference between assigned risk and non-standard auto programs?
- What is PLPD (Public Liability and Property Damage) auto insurance?