Mississippi Car Insurance Laws

Reader’s Question:

I bought a car for my son on a loan here in Mississippi. Since he is the one who is going to use the car, I would just like to put the car insurance policy in his name. Is that possible? The loan, of course, is under my name. I hope you can explain this law to me.

Jasmin

Gulfport, MS

Unfortunately, Jasmin of Mississippi, the car insurance policy must be under your name. It is generally required of the borrower to provide a full coverage car insurance policy. This is meant to protect the lender until the car is fully paid. You yourself must be responsible for any kind of damage on the car. If you are not able to do this, your car may be subject to repossession. Hence, you really don’t have much of a choice but to purchase a full coverage car insurance policy under your name.

You don’t have to worry about getting your son covered, though. If you list him as one of the drivers of the car, he will still be covered in case of any accident or road trouble. How old is he? If he is a teenager, this might raise your premium a bit, but there sure are some ways to save money, too. Paying yearly instead of monthly, keeping your car safe through accessories such as alarms, and maintaining a good driving record lower the probability of accidents. The fewer the risks, the lower the premium.

Here’s another tip. Study the advantages of gap insurances. This is not included in the full coverage car insurance policy, but it is very useful for cars which are still being paid for. Should your car be totaled, gap insurance will shoulder the difference between the value of your car (at the time of the accident) and the loan you still have to pay for. In some cases, the value of the car is less than the unpaid balance of your loan, so the borrower must pay for the difference using his own money. I’m sure you wouldn’t want that to happen to you.