It is so exciting to get to shop for a new car! Before you can drive away in your new ride, you will have to prove to the dealer that you have car insurance - what does this mean for you? Do you need to get new insurance before you buy the car or can your old insurance roll over?
While the safest bet is to check with your insurance company before you buy a car, here are a few things to remember about auto insurance and how it transfers from your current vehicle to a new one.
The first thing you should know is that your current auto insurance policy will temporarily cover a new car, regardless of whether you're replacing an older vehicle in your household or simply adding another one. So, you don't need to purchase new insurance before you buy a new vehicle. However, your current policy only goes so far.
One possibility is your insurance policy transfers exactly as is to the new car. If you only have Liability coverage with minimum limits for your old car, you'll only have Liability with minimum limits for your new one - until you notify your insurance company to change them. If you're financing your vehicle, banks won't loan you money for the car without adding at least Comprehensive and Collision coverage to your policy first. So, in this case, you may need to add coverage to your policy before you can complete your car purchase.
Some of your old insurance policy will probably become ineffective and no longer cover your car once you buy a new car. Most companies give you 30 days to contact them and start the process of switching your policy over. If the grace period that you are given to notify your insurance company that you have a new car runs out you may find yourself with coverage that doesn't match your car and if you have an accident or another situation - like theft or weather damage - you may not be fully covered. The amount of coverage that will move from one car to a new one will depend largely on what kind of new car you are getting.
Replacing your old car with a brand new one isn't just a great deal for you, it can also mean a great deal for your auto insurance. If you get a new car, most insurance companies will let comprehensive coverage will carry over during the grace period but run out after that period and leave you not covered for damages that may occur during an at fault accident or due to weather damage. This could leave you financially responsible to completely replace a car you just bought.
On the other hand, if you are adding an additional car to your family and you do not notify your insurance company immediately, none of the standard coverage will apply to that car. You have to notify the insurance company right away that you are getting another car.
Every insurance company has different restrictions involving replacement or additional vehicles, so make sure you discuss them with your insurance company if you have questions.
While the safest bet is to check with your insurance company before you buy a car, here are a few things to remember about auto insurance and how it transfers from your current vehicle to a new one.
The first thing you should know is that your current auto insurance policy will temporarily cover a new car, regardless of whether you're replacing an older vehicle in your household or simply adding another one. So, you don't need to purchase new insurance before you buy a new vehicle. However, your current policy only goes so far.
One possibility is your insurance policy transfers exactly as is to the new car. If you only have Liability coverage with minimum limits for your old car, you'll only have Liability with minimum limits for your new one - until you notify your insurance company to change them. If you're financing your vehicle, banks won't loan you money for the car without adding at least Comprehensive and Collision coverage to your policy first. So, in this case, you may need to add coverage to your policy before you can complete your car purchase.
Some of your old insurance policy will probably become ineffective and no longer cover your car once you buy a new car. Most companies give you 30 days to contact them and start the process of switching your policy over. If the grace period that you are given to notify your insurance company that you have a new car runs out you may find yourself with coverage that doesn't match your car and if you have an accident or another situation - like theft or weather damage - you may not be fully covered. The amount of coverage that will move from one car to a new one will depend largely on what kind of new car you are getting.
Replacing your old car with a brand new one isn't just a great deal for you, it can also mean a great deal for your auto insurance. If you get a new car, most insurance companies will let comprehensive coverage will carry over during the grace period but run out after that period and leave you not covered for damages that may occur during an at fault accident or due to weather damage. This could leave you financially responsible to completely replace a car you just bought.
On the other hand, if you are adding an additional car to your family and you do not notify your insurance company immediately, none of the standard coverage will apply to that car. You have to notify the insurance company right away that you are getting another car.
Every insurance company has different restrictions involving replacement or additional vehicles, so make sure you discuss them with your insurance company if you have questions.
About the Author:
About the Author: Ashley Jones is an auto insurance advice columnist and blogger for Al Boenker Insurance based in Fort Worth, Texas. Jones specializes in helping Texans understand their car insurance policy and find the best deal. Find out more about your Texas auto insurance coverage and learn more about how you can get the lowest rate on your Texas insurance at thanksal.com.
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