How soon do I need to get insurance after buying a car?
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UPDATED: Oct 19, 2021
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Getting a new car can be a very exciting time in your life. However, it can also be an expensive one. Not only do you have to pay for your car, but you also have to pay for car registration, upkeep and maintenance, and car insurance. You want to make sure that if you’re ever pulled over, you can provide proof of insurance. You’re typically asked for that along with your driver’s license. It’s your responsibility to fulfill your state’s requirements when it comes to coverage.
One way to make new car ownership more affordable is to use an auto insurance premium online price comparison tool. These types of tools help you to compare the rates of several different auto insurance companies at one time in order to be sure you are paying the best rate available. There are many options available, with plenty of answers out there for all of your burning questions.
You can always find an insurance quote online, as well. Use our FREE tool above to compare car insurance rates now!
When do you need to get insurance on a new car?
You’ve done your research and decided which form of coverage you want to buy. Whether it is your dream car, your first car, or something in between, getting car insurance on your new vehicle is an important step that you need to take. In fact, you should have car insurance coverage on your new vehicle prior to driving it off the lot. There’s no rules or any sort of grace period for this type of thing.
This may come as a surprise to some drivers, however, accidents can happen at any time. Just because you are driving your new car home from the dealership doesn’t mean you are immune from an accident.
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How do you get insurance on your new vehicle?
If you do not already have a relationship with a car insurance or an insurance agent, now is the time to do so. Do your research prior to purchasing your car, because you’ll want an auto insurance policy ready and waiting to go once you’ve purchased your wheels. Your dealership may be able to recommend an insurance agent or company to you, but getting established with a new insurance company can take some time. If you already have a current policy, that’s excellent news, and means switching it over to your new car is as simply as providing all the vehicle identification details to your provider.
If you cannot get the insurance you need at the time you are purchasing your car, make your purchase and leave it there until you have been able to secure your auto policy.
It is not worth the risk to drive your new car without proper coverage. You should also keep in mind that in nearly all states, car insurance coverage is a legal requirement. Which means if you don’t have any proof of insurance should you end up in an accident or other driving related incident, you could end up making a hefty out of pocket payment for any damages, medical bills, or any cost of repairs that occur as a result of your actions.
What if I already have coverage on another vehicle?
If you are already established with an auto insurance company, you can call them from the dealership. Let them know you are purchasing a new vehicle. They can either create a new policy for you then or create an insurance binder that will cover your vehicle until it can be added to your policy. If you’ve been researching insurance grace periods, this may come up as one of the only options out there, despite it acting a little differently than a standard grace period. However, it does mean that for the period of time in between purchasing your vehicle and when it can be added to your policy, you’d be covered as long as you can prove you have a binder. It’s a viable means of financial protection, but certainly one that should be left as a last resort.
If you will no longer be driving a different vehicle on your policy, be sure to let them know you will need to drop that coverage. This will ensure that you are not paying for car insurance coverage you do not need.
What types of coverage do I need?
Auto insurance policies are actually like several mini-policies rolled into one. Different types of coverages are good for different situations. It is important to check with your state to be sure you have the types of insurance coverage that are legally required. The different types of auto insurance coverages are:
- Bodily Injury Liability: Nearly all states require liability insurance. Bodily injury liability covers the financial expenses related to death or medical care caused by you in an accident.
- Property Damage Liability: Property damage liability is also generally required in every state. This type of liability covers any property damage that you cause in an accident.
- Collision: Collision coverage is an optional coverage. You can select your deductible, which will impact the amount of your premium. Higher deductibles will generally result in lower premiums. Collision covers your vehicle if it is damaged in a collision with another vehicle or object such as a tree, post, building or a sign.
- Comprehensive: Comprehensive coverage covers your vehicle if it is damaged due to something not covered under collision. It will pay if your vehicle is damaged by a fire or other natural disaster, is vandalized, or if it is stolen. It also covers damages if you hit an animal or from hail or another weather event. Just like collision coverages, comprehensive coverage is also optional sold with a deductible.
- Uninsured/Underinsured Motorist: In some states, uninsured/underinsured motorist coverage is a legal requirement. This type of coverage may cover you if you are hit as a pedestrian. It also is in place to cover damages if you are hit by another driver who does not have insurance coverage or who does not have enough insurance coverage in place to cover all damages done in an accident.
- Medical Payments/PIP: Medical payments coverage is generally optional in most states. It is sometimes also referred to as personal injury protection or PIP for short. This type of coverage will pay for any medical care that you need as a result of an accident. It may also cover time off of work and pay for help around your house, such as a housekeeper, as a direct result of an accident. You should check with your own insurance company to find out what all this coverage will pay for in your state.
- Roadside Assistance: Another optional type of coverage is roadside assistance. Roadside assistance is available should you have car problems on the road such as a flat tire, a dead battery, have locked your keys in your car, ran out of gas, or another type of situation where you need help with a non-working vehicle.
- Rental Car Coverage: If your car is in need of repairs due to damages from an accident, you will likely be without a car for at least several days. This can be a major inconvenience and problem for many drivers. Rental car coverage will help you pay for expenses related to renting a car as a result of an accident. It is an optional coverage and usually has limits as to how much it will cover each day and how long it will cover a rental car for.
- Gap Coverage: If you lease your vehicle, you are likely contractually obligated to have gap insurance. If you currently still owe on your car loan, it is also a good idea to have this type of coverage. In the event that your car is damaged beyond repair, gap insurance will cover the difference between what your car insurance considers fair market value for your vehicle and what is still owed on the lease or the loan for your car.
Drivers should also note that if they are leasing their car or still owe on their car loan, they are likely required by the bank or leasing company to have additional coverages on top of what is legally required. Usually, this means comprehensive and collision coverage.
Car insurance is of vital importance from the moment you drive your new car off of the lot.
Not having the proper coverage can lead to severe financial and legal consequences. Having the proper insurance is only half the battle; the other half includes being mindful of when you should bet setting up said insurance.
To be certain you are paying the best rates on your auto insurance coverage, use an online price comparison tool. Start comparing car insurance rates now by entering your zip code in our FREE tool below!