How do I transfer insurance to my new car?

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Here's what you need to know...
  • There are limitations to how long coverage will extend in certain situations
  • Your existing coverage does extend to other vehicles as described within the contract
  • If you have only liability coverage, you will only have liability on your replacement car

While you are focused on finding a reliable car that requires little maintenance, has great safety ratings, and gets several miles to the gallon, you also need insurance.

Since insurance is an expense that you cannot avoid taking on, knowing how much you should expect to pay before you sign on the dotted line is crucial.

Not only should you compare premiums, you should also learn how your insurance will transfer to your new car so that you are sure you have coverage when you drive off of the lot.

Start comparing car insurance rates now! Enter your zip code above to get started now!

Will your existing insurance protect you when you buy a new car?

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When you sign up for coverage, you are agreeing to the terms of the contracts and fulfill your obligations as a client.

Most people who own vehicles buy insurance because they know that it is required by the state.

Unfortunately, a majority of consumers do not take the time to read through the contract so that they know how specific situations are handled.

One of these situations is when you trade your vehicle in and replace it with a new one.

You could assume that you are covered when you drive the listed vehicle, but that is not always the case.

If you locate your policy, you will locate a section that lists which vehicles are covered.

Your existing coverage does extend to other vehicles as described within the contract.

Some other vehicles that are defined as covered autos include:

  • A temporary substitute vehicle that the insured does not have regular access to
  • A permanent replacement vehicle owned by the named insured
  • A newly acquired vehicle
  • A trailer that is owned by the insured and pulled by a listed vehicle

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Know the Coverage Extension Limitations

Not all coverage extends all the time. There are limitations to how long coverage will extend in certain situations.

Knowing when limitations exist is critical when you are relying on your coverage to automatically extend to your new purchase.

Here are some of the limitations that you should be aware of when you are buying a new car:

– What You Carry is What Will Extend

Your coverage does automatically extend to a new car, but only the broadest form of coverage that you currently carry.

If you have only liability coverage, you will only have liability on your replacement car.

The only scenario where full coverage is provided is when you have a vehicle and you are adding a second car that needs full coverage.

In this scenario, comprehensive and collision will only extend for 4 days.

– There is a Time Limit

Coverage does not extend for the entire term. In fact, you have a very short period of time to transfer your insurance before there is a lapse.

You will have between 14 and 30 days of automatic coverage on the replacement car before you have to legally add it.

The actual time period depends on the carrier and the state law.

– The Same Deductibles Apply

The coverage options that you carry will extend and so will the deductibles.

If you carry a high deductible, be sure that you consider changing it to satisfy lending requirements.

Lenders may only allow you to carry a $500 deductible.

What You Should Do to Find the Best Rates

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Finding the best rates should be a priority now that you know that you have a little time to shop around.

You should call your agent and get quotes on models that you are interested in before you make a purchase.

Here is the information that you will need as you are comparing premiums:

  • Name, date of birth and license number for all drivers in household
  • Years licensed
  • Vehicle make, model and VIN
  • Address where vehicle will be stored
  • How many miles you drive per week/ per year
  • How you use the vehicle
  • Type of insurance you are seeking
  • Limits of insurance you are seeking
  • Prior insurance information
  • Dates of infractions or dates of accidents
  • Types of claims filed

Transferring insurance to a new car after a trade is an option, but it is not always the best option when you want the best rates.

You should always take the time out of your schedule to compare rates. Start comparing car insurance rates now! Enter your zip code below now to get started!

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