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When would I sign the car title to the insurance company?
Getting into an automobile accident is no fun at all, and if one occurs there can be many questions as to what the next steps in the process are. What will the insurance company pay for? Whose insurance company pays for what? What happens to my car if it is totaled? Many questions might need to be asked. What many people do not know is that there are some circumstances where you may need to sign your car title over to your insurance company. If this is a situation that you are in, or you want to learn more about when and why this might be necessary, this is the article you should be reading.
In terms of the basics, you need to know that if your car is totaled, you may need to sign the title over to your insurance provider. You will also want to determine the market value of your vehicle using a website like Kelly Blue Book. Keep in mind that as the seller of the car you will likely not be responsible for any taxes related to the sale.
Understanding a Car Title and its Relationship to your Car Insurance Company
Your car title is an essential document; the person who holds a car title is recognized by law in most cases to be the owner of the vehicle. Because of this, you will want to take care when signing your title over to someone else, because you are essentially giving them ownership of your vehicle. There are a few different situations where you might sign your title over to someone else, but there's really only one reason that you would sign your vehicle title to your car insurance company. This generally only happens in cases where your vehicle is declared a total loss. Due to a large number of title scams in existence, you will want to make sure you understand why a title would get signed over, what the title is, and how to properly sign the title over to another person or company.
Upon purchasing a vehicle, there are times where you might not receive the title for the car. If you purchase the vehicle outright, you will receive the title, but if you are utilizing auto financing options, or leasing a car, you will not receive the title. The lender or leasor will hold onto the title of the vehicle, which will show that company as the lien holder on the car. Essentially, this means that they have a lien on your vehicle until your debt is fully paid. At that point, you will get the title to the car signed over to you. This helps protect the financing company by using the vehicle as a sort of collateral. It is possible for a vehicle to have other liens on it in some very limited and specific cases, but for the most part, cars are signed over to the vehicles purchaser when the debt on it is paid in full. You will also want to make sure that all liens are removed from the title of a pre-owned vehicle before you purchase it, as a side note.
When to Sign a Car Title Over to a Car Insurance Company
There are some cases when a car insurance company may also be a financing company for an automobile loan, but outside of this, there are very few situations where you would sign your car title over to them. Generally speaking, the only time that a person signs their car title over is when they sell their vehicle, or when they give it away. Pretty much the only reason that you would sign an automobile title over to a car insurance provider is if your car is both totaled and covered by your insurance policy for the reason it was totaled. In this case, you should receive fair market value for your vehicle from your automobile insurance company.
You will want to know what the fair market value for your car is before you sign the title over, to ensure that you get the proper amount for it. Once they have paid you for your car in full, by paying the fair market value, you will sign the title over to them. This will give them possession of the title and ownership of the vehicle. If for any reason you believe that you are not being paid enough for your total vehicle, you may need to postpone signing over the title until you have done more research. Once you have signed the title over, they own the car and you will not have any recourse for negotiating the price that you get for the vehicle.
How to Sign Over a Title to a Car Insurance Company
Again, you will want to research the fair market value of your car before signing the title over to a car insurance provider. Many variables are taken into consideration, including the make and model of your vehicle, the age of the vehicle, the mileage of the vehicle, condition of the vehicle, and any additional installations to the vehicle, when figuring out fair market value.
Once you have determined fair market value, and have been paid that amount, you will sign the vehicle over to your car insurance provider. You will need to have the title in hand to sign it over, so if your financing company has the title, they will need to be involved with the transaction. Always keep your title in a safe place, only give it to someone when you have received payment in full, and keep insurance on your vehicle until the sale is complete. Once both you and the buyer sign the title, in this case the car insurance company, the transaction is complete, and the title is handed over to the car insurance company.