In most states, you can’t drive a car off the dealership lot without any coverage, and you can transfer insurance when replacing the old car.
Transferring the current insurance to the new car does not always have to be done immediately after purchasing the vehicle. Insurance companies offer a grace period that you can use to update the insurance and coverage of the new car.
The transfer should be done considering your needs, the terms and conditions of the policy, and the cost and deductible before deciding whether to extend the contract with the insurance company or look for a new company that meets the new purchase requirements.
Steps to switch insurance to a new car
Knowing how to switch car insurance to a new car, you’ll understand that what’s ahead doesn’t have to be complicated or intimidating. The first thing to do is to make a call to your agent, although some insurers allow you to do it online. Request an updated quote with all the details of the new car.
Take the time to reevaluate the coverage. You may want to increase limits or add other types of insurance if you protect your investment. Although you have the option to pass the insurance as is, this is a risky decision since, in case of damage, you will have to pay for the repairs out of your pocket.
Follow these single steps to switch the insurance to your new car without complications:
1. Contact your insurance provider
Call your agent or insurance company to notify them that you are about to buy a new car. Doing this before the purchase is finalized will be much better. This option will increase the possibility of completing the transfer before you get the new vehicle.
2. Get an updated quote
It is almost certain that the rates will increase, especially if the new car has a higher value than the old one. Provide the insurer with the details of the vehicle you are buying for a more accurate quote. Among the information requested is:
- Vehicle identification number
- Safety features
- Make and model
- Vehicle Model
- Year
3. Reevaluate your coverage needs
Since you are about to transfer your policy to a new car, the moment is auspicious to evaluate if changes can be made for the benefit of the new vehicle. Verify that the coverage limit is ideal for the newly purchased car.
If the new car has a higher value than the old one, it is necessary to increase the coverage limits. You may want to include comprehensive and collision insurance so the policy can cover the cost of repairs in case you damage the car.
You may even want to purchase gap insurance, which will help you pay the difference between your car’s market value and the vehicle’s remaining value in the event of a total loss. It is only applicable and advisable if the purchase is made through a loan.
4. Find out about any additional costs
Check with the insurance company if they will bill the difference in case of a rate increase. Some companies may split the amount between monthly payments, and others may require the customer to pay the additional costs upfront. Some insurers charge an administrative fee for processing the insurance transfer to the new vehicle.
5. Compare different quotes
Even if you get the most current quote from your insurer, don’t just go with that one. It’s a good idea to collect and compare quotes from different companies. It will let you see if you are getting the best deal possible.
Once you’ve decided which coverage fits your needs, it’s time to complete the process. It’s time to complete the process. You should get the new or amended policy documentation to reflect the further car coverage and any changes made.
Importance of car insurance transfer
Buying a new car involves many details, but one that cannot be left out under any circumstances is insurance. In this case, if you already have insurance, then the transfer must go smoothly.
The importance lies in the fact that you cannot leave an insurance policy to expire since you would be incurring a serious crime. Assuming you do not switch your car insurance to a new car and drive it without insurance, you risk receiving a citation for driving a vehicle without any coverage.
Having an uninsured car is not understandable since insurers give drivers a grace period, i.e., about 30 days, to upgrade and transfer insurance to the new vehicle. You keep the coverage of the old car, which is a great help when you decide not to switch the old vehicle immediately.
In case of unforeseen situations, if you have not been able to make the switch, you can contact your agent immediately to request an insurance policy transfer. The transfer can be complex; however, you can always count on the provider to help you with every detail.
How much does it cost to switch to a new car insurance policy?
Before finalizing the purchase of a new car, the best thing to do is to request an insurance quote, so you will know what to expect in terms of rates and coverage. You already know that you can evaluate different options, but the best alternative is to transfer the car insurance to the new car.
Expect the policy premium to increase, especially if the new car’s value is higher than the old one. The estimated amount for the insurance switch is $1,450 per year. But only if it is a full coverage policy with 100/300/100 liability limits.
These limits mean that, if an accident occurs, the insurance may pay up to limits corresponding to those numbers. That is, it will pay up to $100,000 for property damage to the other driver’s vehicle, $300,000 for the other driver’s medical expenses, and up to $100,000 for each person injured.
The actual rate may vary depending on the model, make, and vehicle year. If you decide to increase the limits once your policy is reevaluated, it also means an increase in the premium.