A co-signer may not necessarily have to be on the insurance policy for the vehicle that the loan was taken out on. It is important as a co-signer to make sure that there is proper insurance on the car because by being on the paperwork for the car you can be responsible for what happens with the car.
If the primary policyholder on the loan does not properly insure the vehicle, you may be held accountable. Because a lien holder typically requires both comprehensive and collision to be carried on a vehicle with a balance due.
As a co-signer on the loan, you are partly responsible for those who drive the vehicle and the damages that might result from their actions. You have vicarious liability as a co-signer. So if you are not the one to have insurance on the vehicle, make certain that the primary does have the required insurance continually carried on it.
As a co-signer, you may request that the person holding the insurance list you as an additional insured. That way you are notified of any policy changes or cancellations.
If you have decided to take out full coverage on the financed vehicle to make certain that the car is insured properly, you can start car insurance comparison.
— Michelle Megna contributed to this story.
