Proof of Insurance Responsibilities

May 14, 2018 | Member News

Dealers have been receiving calls from customers wondering why the dealer did not update the customers’ insurance after a vehicle sale. This frequently occurs when a customer is in an accident and only then realizes that the insurance was not transferred to the new vehicle in a timely fashion.


It is not the dealer’s responsibility to make changes to a customer’s insurance. In fact, a dealer does not have the authority to make such changes. It is the customer’s responsibility to contact their insurance provider to have their insurance updated.


Some lienholders, however, may place additional requirements on the dealership to notify the customer’s insurance company of the vehicle purchase as part of the financing transaction. Customers should be reminded to contact their insurance company to authorize policy changes.


Verifying Information

Under PennDOT rules, a dealer who is authorized to issue a vehicle registration renewal or temporary registration, must only verify financial responsibility prior to issuance by examining one of the following:


1.       An insurance identification card or self-insurance card;

2.       An insurance policy declaration page;

3.       A certificate of financial responsibility;

4.       A valid insurance binder; or

5.       A Pennsylvania Insurance Plan Application (PAIP).

6.       Electronic financial responsibility identification card – agents are still required to keep a copy of the proof of financial responsibility for a minimum of three years.


Registration Name Must Match Insurance

Each of the above documents must contain the customer’s name. The dealer is not required to verify the validity of the information unless there is a reason to believe the documentation is fraudulent.


Courtesy of PAA Bulletin No. 9, 5/10/2018