A co-signer may not necessarily have to be on the insurance policy for the vehicle on which the loan was taken. As a co-signer, it is essential to ensure proper insurance on the car.
If the primary policyholder on the loan does not correctly insure the vehicle, you may be held accountable. Because a lien holder typically requires both comprehensive and collision to be carried on a car 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 sure 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.
— Michelle Megna contributed to this story.