Getting a new car is an exciting prospect, but you want to make sure that you are covered to drive the new car as soon as you buy it. Every state requires that you carry a minimum amount of liability insurance on your vehicle. Some states also have requirements for uninsured motorist coverage. If you buy the car at a dealership with financing, the financing lender may also have requirements for your insurance coverage.
Does My Current Policy Cover My New Car?
You want to be covered by insurance when you first drive the new car off the lot. Most car insurance companies insure you against liability even if you drive another vehicle other than your own. If your policy allows for this coverage, then you are technically covered when you drive the car off the lot.
However, the coverage you have may not really be sufficient. If you are going from a 10-year-old car to a brand new one, you probably don’t have enough coverage with your existing policy. In addition, if you have liability only coverage on your old vehicle, that is all you will have with the new car until you get the new car added to your insurance policy.
Before You Buy the Car
It is a good idea to consider car insurance before you ever make the purchase of a new car. If you are debating between several different makes and models, you might check with your insurance company for quotes before you make a purchasing decision. Car insurance premiums can vary widely between makes and models. You may want to make your decision on what car you buy based on how expensive the new insurance will be.
Changing Your Policy Online
Most car insurance companies have an online platform where you can make changes to your policy. If you know exactly what coverage you need, this can be a viable option. If you go that route, you’ll want to add the new car to your policy as soon as you can. You will also want to remove the old car if you sold it or used it as a trade in.
If you keep the old car, you must maintain insurance on it even if you aren’t going to be driving it. State law requires that you always have at least liability insurance on any registered vehicle. Make sure that you don’t remove the old car until it has been sold if you didn’t use it for a trade in.
Contacting Your Agent
There are some good arguments for contacting your agent directly by phone or in person rather than making policy changes online. If you aren’t sure what coverage you need, you are better off contacting your insurance agent and discussing it with them. The agent will be best able to make sure that you are adequately protected and are getting the best rate possible with their company.
The best policy is to call your insurance agent before you ever leave the dealership with the new car. Contacting them as soon as the purchase is made ensures that you are covered from the moment you drive the new car off the lot. Often your agent can make the changes to your policy immediately, with any adjustment in the premium being paid within a set number of days.
Calling your insurance agent before you leave the dealership has other advantages. If your lender requires specific coverage for your vehicle as part of your contract, you can be certain to meet those requirements if you have the representative there with you when you make the call to your agent. Your dealer that arranges the financing can explain exactly what coverage you need so that you can be protected and in compliance with your financing contract.
Does Your Policy Start Over?
Your policy term, in most cases, will simply transfer to the new vehicle. You will not have to start over with a new six month or one-year policy. This is usually a good thing, because with the new vehicle you may be able to get better rates somewhere else. After you have transferred your car insurance to the new car, find out when your current policy ends. You can then shop around for some insurance quotes to see if you can get a better deal through another company instead of renewing with your current company.
The Bottom Line
Transferring your car insurance to a new vehicle is a fairly simple and straight-forward process. Whether you make the changes to your policy online or directly with your agent, it is easy to get the coverage you need to make sure you are protected, within the law, and within your financing contract requirements.