Before you buy a new car, you need to make arrangements with your insurance company to have the car added to your coverage.
If you are selling or trading in your current car, you will also let your auto insurance agent know that you no longer need coverage for that vehicle.
You can accomplish this by calling your auto insurance agent over the phone. If you have your proof of insurance card, the number for your insurance agent will be on the back of the card.
Notifying Your Insurance Company About a New Car
The best way to go about transferring your auto insurance is to alert the insurance company before you make a purchase of a new vehicle. One of the reasons why this is a good idea is that the new car you purchase could affect the rate you pay for insurance.
For example, if you use to drive an average sedan and you decide to purchase an exotic sports car, your rate is going to go up by a significant amount. So that you are not surprised by any rate increases for your premium, it is prudent to talk to your insurance agent ahead of time.
If you decide to finance your new car or lease a car, the auto insurance company will need information about the dealership or lender for your car loan. The reason for this is that the lender or the dealership has a financial interest in the car itself.
This is relevant if there is ever a claim for damage to your car under your car insurance policy.
If you are not able to notify your insurance company right away about your new car, there is probably a grace period under your policy during which coverage would still be extended to the new car.
This grace period will vary according to the insurance company and your specific policy. In any event, the most responsible thing to do is talk to your insurance company as soon as possible when you have decided to make a car purchase or immediately after you have purchased a new car.
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Getting a Great Rate for Insurance on Another Vehicle
When you go through adding another vehicle to your car insurance policy, this is a great opportunity to look into the rate you are paying for car insurance. You also need to assess whether any additional coverage will be required for this new vehicle.
You may even be required to get additional coverage when you purchase a new vehicle, especially if you need to take out a car loan.
The standard types of insurance coverage that lenders or car dealerships (if you are leasing a car) include comprehensive and collision coverages.
Whereas a standard auto liability policy protects you from paying for damage that you are responsible for causing to another vehicle or person in an accident, these supplemental coverages help to protect your car itself.
The lender or dealer will want to make sure their car is taking care of financially in case something happens while you are still paying it off or leasing it.
The best way to make sure you are not paying too much for the supplemental coverages is to shop around for as many quotes as possible. If you do this ahead of time, you can be even more sure that you are not paying too much for supplemental coverage on your new vehicle.
Paperwork and State Requirements for Transferring Your Car Insurance
The good news about transferring your car insurance is that the auto insurance agent will take care of all of the necessary paperwork for you. This includes filing whatever forms are necessary for your state Department of insurance.
However, it is your responsibility to make sure that you do not go for any period of time without having car insurance.
What you need to make sure of is that you do not stop coverage on your current vehicle while you are still driving it, even if you plan to sell it or trade it in for your new car.
Along those lines, you also need to make sure that you do not wait too long to tell your agent that you purchased a new car.
Bottom Line on Transferring Your Car Insurance
If you purchase a new car and need to update your insurance information, you should do this as quickly as possible.
You may be covered for a certain grace period, but you can end up paying penalties or having your claim denied if something goes wrong after this short grace period.
Before making any final decisions on your insurance company, it is important to learn as much as you can about your local insurance providers, and the coverages they offer. Call your local insurance agent to clear up any questions that you might have. Questions to consider asking include, “What is the best coverage plan for me/my family/my situation?” “What are the minimum coverage requirements in my state and what form of coverage do you recommend?” “Do you guys offer any bundle discounts if I take out both my auto insurance and home insurance with you?” and “What is the average rate of insurance quotes you guys offer?”
Before making any big insurance decisions, use our free tool to compare insurance quotes near you. It’s simple, just plug in your zip code and we’ll do the rest!