Expert: Anne - 10/19/2011

Question
Dear Anne,
We are buying a car from a private party, we paid the money and having the car now, but due to the loan of previous owner, we need wait about 30 days to get the title.
the car now has the previous owner's tag and insurance(I assume), should we go ahead and buy the insurance for the car with our names?
In case, there is an accident on our hands, which insurance policy do you think will be followed?
The insurance is following the driver or follow the car?
Thanks
Yan

Answer
Hello,

Insurance follows the car IF there is an insurable interest. The moment of the vehicle was sold to you (note: sold does not equal title or registration transfer), the insurable interest of the prior owner dies. That insurance company will not likely pay for any damage to the vehicle.

You must insure this vehicle. Typically, the policy of your other vehicles will provide for a "newly acquired auto" provision for a small period of time (sometimes one week, sometimes up to 30 days). However, to be safe, you should ad this vehicle to your policy.

Good Luck
Anne
http://www.auto-insurance-claim-advice.com/