How long do I have to transfer my car insurance?
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UPDATED: Sep 23, 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 coverage to a new vehicle or 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. 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!
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. It is the responsibility of the driver to ensure they are following all of their state’s insurance requirements.
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Transfering 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.
Switching Insurance Companies
Many people choose to switch auto insurance companies at one time or another in their life. There can be many 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.
To begin, notify your old and new insurance company in writing and be sure to include the date that the switch will be effective. 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 cancelation fee or service fee upon cancelation. 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. You will save yourself a lot of potential hassle by doing this research first. You can also use an online price comparison calculator to be certain you are getting the best rates.
Types of Auto Insurance Policies
When transferring car insurance from one vehicle to another or from one company to the next, 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.
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. 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!