A lot of insurance companies would like to see that your car has insurable interest in order to purchase auto insurance through them. Possessing insurable interest in your car means that you’d suffer an economic loss if it were damaged.
It is typical that the people that can register the car are the ones to be considered to have insurable interest. To confirm any insurable interest, it may be necessary to provide the car’s registration in your name. However, if you have just purchased the car, then simply showing a bill of sale or a title signed over to you and the insurer is likely to accept it.
Proving insurable interest also allows the company to see that you are not part of any fraudulent situation, like trying to insure a younger sibling’s car so that they can get a better insurance rate. Involving yourself in fraudulent situations is always a bad idea and can land you in a good bit of trouble or at the very least, give you extra bills.
Auto insurance providers will typically get the registration information of your car from the state’s department of motor vehicles, or through a vendor that gathers all state’s DMV information for it, by using the VIN number provided during quoting or the purchasing process. The information provided will give the insurer a confirmation that you have insurable interest in the vehicle, as well as confirm that the make, model, and any other information supplied by you during the purchasing process is correct.
The bad part is when it is revealed that you have a branded title, which often surprises the owner as well. A branded title is a salvage or rebuilt title which can cause trouble in determining coverage for the vehicle.
There are actually some auto insurers that will not offer insurance for vehicles with branded titles. Then there are some that will offer liability coverage, but not collision and comprehensive insurance. On top of these, there are still some that simply won’t restrict the coverage in any way. So it is important to discover as much information on your vehicle as you can in the beginning to save some time for both you and the insurance company.