When buying a car from friend and waiting for the bank to send title so he can sign it over who needs have insurance new owner with bill of sale or seller whose name is on title?

The new owner, in this case you, the buyer, would need to have insurance with a bill of sale. In most states, you are required to have insurance in order to register a vehicle. Since the title is still in the seller's name, you will need to provide proof of insurance in order to register the vehicle in your name.