How long do I have to transfer my car insurance?
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UPDATED: Oct 19, 2021
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In nearly all states in the U.S., car insurance is a legal requirement. This makes transferring your car insurance, whether you are transferring your current policy to a new vehicle or you’re moving from your current insurer to a new auto insurance company, very important and timely. Going about the process the wrong way can lead to more time and hassle, not to mention possible negative legal and financial ramifications. Make sure you know ahead of time if your insurer has any cancellation fees in effect if you’re leaving, or whether or not you’ll have a lapse in coverage if you wait too long. You want to avoid both scenarios, so that you don’t end up burning through your savings trying to get your car insurance in order.
To get the best price on your auto insurance policy, be sure to utilize an online insurance price comparison tool. These tools have made comparing several different auto insurance companies and quotes quick and easy. Compare car insurance rates now by using our FREE tool above!
Is car insurance legally required?
With the exception of drivers in New Hampshire, all drivers in the United States are legally required to carry an auto insurance policy with minimum coverage on their vehicle. However, coverage requirements will vary by state. An insurer generally has a minimum requirement set up, one that you can add additional coverage to if you choose to do so.
It is the responsibility of the driver to ensure they are following all of their state’s insurance requirements. This includes having continuous coverage, even if you’re switching from your current provider to a different company, or simply altering what coverage types you’re paying for. It also includes knowing what the cancellation process is, in order to avoid any sort of penalty or fee associated with cancelling your coverage. Understanding what is required of you in your state can end up saving you hundreds of dollars.
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How does one transfer car insurance to a new vehicle?
If you are purchasing a new vehicle, you will need to call your insurance agent or the customer service department at your auto insurance company as soon as possible. Although an insurance policy is not required to purchase a new car, you will need to have insurance on your new vehicle as soon as you drive it off the lot. Not taking this step can be extremely risky and land you in financial and legal trouble. Some dealers will not even let you drive off the lot without proof of insurance or an insurance binder.
Keep in mind that if you are leasing a vehicle or making payments, your contract likely requires that you have proper insurance on the car at all times.
If you are trading your car in or getting rid of a vehicle to get a new one, make sure you let your auto insurance company know so that they can make the appropriate changes to your policy in that regard as well. This means that they take your current coverage and apply it to the new vehicle. Most auto insurers do this so that you aren’t without coverage for any period of time.
However, keep in mind that the price may change depending on the type of vehicle you buy. In order to receive an accurate quote, you’ll want to let your current company know the specific details of the new vehicle you’re going to purchase. Plus, the insurance requirements may change as well. Newer vehicles tend to require additional coverage; your auto policy may end up looking completely different.
Regardless, you’ll want to inform your provider as soon as possible, so that you don’t have any coverage lapses, and maybe you’ll be offered competitive rates by mentioning that you were shopping around to see who had the cheapest option. Sometimes when you’re juggling vehicles, a company will do all they can to keep long-term customers.
What about when you switch companies?
Many people choose to switch auto insurance companies at one time or another in their life. There can be a variety of reasons for taking this step, such as getting a better premium price with a new company or receiving poor customer service from an old company. If you weren’t offered any additional savings with your old provider, you can move on to the insurer who offered you the cheapest price.
To begin, notify your old and new insurance company in writing and be sure to include the date that the switch will be effective. Give them ample notice as well. Do not cancel the old policy until you have confirmed that the new one is in place. Once you have decided to make the switch, you can decide when to do it. However, some auto insurance companies will charge an early cancellation fee or service fee upon cancellation. Just like when they have to send you a cancellation notice, they expect you to give them a heads up if you’re leaving as well. Though in this instance you end up owing them money. Check with your auto insurance company to be sure.
Switching insurance providers is within your rights as a driver and as a consumer, however, you will want to make sure that there are no gaps in your coverage during the process of switching.
In addition, before transferring your car insurance to a new company, do your research. Be sure that the new company is certified to do business in your state. Find out what other consumers are saying about the company and its service. If you see that a company has a history of providing people with a bad customer service experience, you may want to steer clear of them. You will save yourself a lot of potential hassle by doing this research first. Just looking at the cheapest car insurers won’t guarantee you’re finding the best deal. You want to know that if you need to file an insurance claim, the company you choose will be there for you. You can also take advantage of an online price comparison calculator to be certain you are getting the best rates.
What are the types of coverage options?
When transferring car insurance from one vehicle to another or from your previous insurance company to a new provider, it is vital that you understand the coverages available to you and that you purchase what you need. Here are the various types of car insurance available:
- Bodily liability: This component of car insurance is usually the minimum amount required by each state law. Bodily injury liability is in place to cover any physical damages you do to other parties in an auto accident. This includes medical expenses and death-related expenses, if applicable.
- Property liability: Property liability applies to the property of other parties that you damage with your vehicle. It could include vehicles as well as building structures, landscaping, or telephone polls. It is important to know that property liability does not include the vehicle that is insured. For that type of coverage, you will need a collision and comprehensive coverage.
- Collision: Collision is an option coverage on your auto insurance. It covers your vehicle in the event of an accident. It will pay for car repairs or fair market value of your vehicle if it is less than the repair costs would be. With this type of coverage, you can select your deductible and coverage amounts.
- Comprehensive: Comprehensive coverage is also optional. It covers other damages to your vehicle outside of a collision. This includes fires, natural disasters, theft, vandalism, and flooding. With comprehensive you also choose your deductible and coverage limits.
- Med Pay: Med Pay, also known as Medical Payments or Personal Injury Protection (PIP), cover medical bills for you and your passengers involved in an accident. In some cases, it can also cover missed time off of work and the costs of hiring necessary help around the house as a direct result of injuries sustained in an accident. Some states legally require Med Pay coverage and the most common amount is $5,000.
- Uninsured/Underinsured motorists: Even though nearly all states legally require drivers to carry active auto insurance, some drivers do not or are underinsured. This is where uninsured/underinsured motorist coverage comes into play. If you are in an accident with such a driver, this coverage is very important and is required in some states.
- Gap insurance: If you are leasing a car or are still making payments on your car loan, you should consider, and may even be contractually required to carry gap insurance. Gap coverage fills in the gap, so to speak, between the amount still owed on your loan or lease and the fair market value paid out to you by your auto insurance company, if you are in an accident.
- Rental car reimbursement: If something happens to your vehicle and you need a car to drive while it is being fixed or while you shop for a new one, rental car reimbursement is a nice addition to your auto insurance policy.
The biggest reasons that customers end up transferring insurance is because they’ve gotten a new vehicle, or they’re switching companies. It is a good idea to review your auto insurance policy a couple of times per year to be sure you are getting the best premium and have the coverage you need, even if you are not getting a new vehicle or changing insurance companies. The long story short is that you should be prompt and precise in providing the new information to your current or new provider. The longer you wait, the higher the chance of you having to spend extra money and running into bad times.
When shopping for car insurance, make your search easier by using an online price comparison tool. Enter your zip code in our FREE tool below to start comparing car insurance rates now!