Difference between Car Registration and Insurance

Key difference: The car registration is a legal declaration that specifies who owns the car. This declaration is kept on file by the government who can then track the owners of the car. On the other hand, car insurance is a type of insurance that protects the car owner against financial loss in the event of an incident involving the vehicle, such as an accident.

Car Registration and Insurance are interrelated. They are both required in order to legally operate a vehicle. However, car registration and insurance differ from each other quite significantly and serve two different purposes.

Whenever a car is bought, whether it is new or previously owned, the car needs to be registered with the proper authorities. The car registration is a legal declaration that specifies who owns the car. This declaration is kept on file by the government who can then track the owners of the car. This is especially important in cases of lost or stolen cars.

It is also impossible to sell a car without the previous owner’s registration. The buyer will again need to register the car on his own name. If the buyer is buying a new car from a dealership, the dealership will usually help register the car on the owner’s name. In order to register a car, the following documents are usually required: owner’s driving license, the title document, a bill of sale, proof of insurance, etc. The license plate for the vehicle is only provided after the registration is completed.

On the other hand, car insurance is a type of insurance that protects the car owner against financial loss in the event of an incident involving the vehicle, such as an accident.

There are many types of auto insurance, which may include any or all of the following aspects:

Property coverage, for damage to or theft of the car
Liability coverage, for the legal responsibility to others for bodily injury or property damage
Medical coverage, for the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses

Car registration is usually compulsory in most countries. Insurance may also be compulsory is some countries.

Comparison between Car Registration and Car Insurance:

	Car Registration	Car Insurance
Description	The car registration is a legal declaration that specifies who owns the car. This declaration is kept on file by the government who can then track the owners of the car.	Car insurance is a type of insurance that protects the car owner against financial loss in the event of an incident involving the vehicle, such as an accident.
Purpose	To register the ownership of the car by a particular person or persons.	To protect the policy holder from financial loss in case of an accident, such as damage to or theft of the car, legal responsibility to others for bodily injury or property damage, cost of treating injuries, rehabilitation, lost wages, funeral expenses, etc.
Compulsory	Car registration is usually compulsory in most countries.	Insurance may be compulsory is some countries.