If you co-sign on a loan it is possible that you could be held responsible if there was an accident and the vehicle was not properly insured. As a co-signer you are partly responsible for those who drive the car and what occurs while they are driving by what is called vicarious liability.

Usually the financial institution that is the lien holder on the vehicle will require comprehensive and collision coverage above the state's mandatory liability car insurance. This way their investment is the vehicle is protected. If the insurance lapses on the vehicle they might decide to take out insurance on the vehicle themselves and add the cost, which will be high, to the loan.

If you need insurance rates for the car in which you co-signed on, follow this link for a free car insurance quote.