Understanding New Car Insurance Coverage

When you buy a new car, you want to make sure it’s properly protected. But what if you already have auto insurance? Do you need to purchase an all-new policy? We’ll help you figure out everything you need to know about new car insurance coverage, including how it works and how to get it.


New Car Insurance Grace Period

If you already have car insurance, your existing policy may cover your new vehicle. Typically, once you’ve bought a new car, you have 14 days to tell your insurance company about the purchase. It’s best to do this the day of the sale, but if that’s not possible, do it as soon as you can.

Can I Transfer My Car Insurance to a New Car?

Under most circumstances, you can transfer your insurance to a new car. So how can you switch insurance to a new car? Usually, a call to your insurance agent will do the trick, but some insurance companies allow you to replace a vehicle on your policy with a few clicks online.

This is also a good time to reevaluate the needs of your car. If you have an older vehicle that’s paid off, you may be able to drop comprehensive or collision coverage from your policy. But, keep in mind that removing these coverages leaves you financially vulnerable should you get into an accident.

Can I Drive My New Car Without Insurance?

In the states that do require insurance (and almost all states do), a reputable dealership won’t allow you to drive your car off the lot if you haven’t provided proof of insurance. If you already have car insurance, this should be easy enough to get, but if you don’t already have car insurance, you’ll need to purchase coverage before the sale. The dealership can help communicate your new vehicle’s info to your insurance company.

Do I Need Insurance Before I Buy a Used Car?

While you don’t need to have insurance before you buy the car, you do need it to drive the car off the lot and take it home, no matter if it’s new or used. If you need help navigating the coverage process for a new or used car, connect with an American Family Insurance agent to get started.

Do I Need to Purchase Gap Insurance?

Lease and loan gap insurance isn’t required, but it is a useful coverage to have on your policy in the event of an accident that totals your car. If your car is totaled, this coverage helps pay for the difference between the actual cash value of the car and what’s left on your loan at the time of the accident. For example, if you still owe $17,500 and your car is valued at $14,000, this insurance would pay that remaining $3,500.

Dealerships often offer this coverage as part of the car purchase package, but you can get this coverage through your car insurance company instead, usually for a much more affordable price.

On your way to the dealership to pick out a new car? Let your American Family Insurance agent know when you purchase your new ride so your insurance can stay up to date and your car can stay protected.


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Related Topics: Insurance Terms , Insurance Needs , Car Insurance , Car Buying