Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in...

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Reviewed by Jeffrey Johnson
Insurance Lawyer

UPDATED: Jul 14, 2021

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Here's what you need to know...

  • You are legally required to have insurance before driving your new car off of the lot
  • You may also be contractually required to have certain coverages such as gap, collision, and comprehensive
  • Be sure to have the required information before calling your insurance company or agent to get your new vehicle insured

There is nothing like the experience of driving a new car. The new smell, the new gadgets, and the feel of an unfamiliar steering wheel in your hands.

However, before you put the keys in and start the ignition on your new set of wheels, it might be time for an insurance reality check.

Enter your zip code above to get FREE car insurance quotes today!

Legally Mandated Insurance

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It doesn’t matter if you have had your car for a decade, a year, or are just driving it off of your dealer’s lot today.

You are legally required to have insurance coverage on your vehicle prior to driving it on any public roads in nearly every state.

Just purchasing a new car is not an exception to this rule. You cannot legally drive your new car home without auto insurance.

In fact, many dealerships will require you to have proof of insurance coverage prior to handing you the keys to your new vehicle.

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Leased or Financed Vehicle Insurance Requirements

In addition to meeting the legally required amounts of insurance coverage in your state for our new vehicle, you are also required to meet the standards set by your leasing company or bank.

If your new vehicle is leased or financed, you are likely contractually required to obtain and keep current full coverage.

This to protect both you and the bank or leasing company if there is a loss.

What if I already have insurance on another vehicle?

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Since you are taking legal possession of the new vehicle at the time you leave the dealership, you will have to have a valid insurance policy for it.

Call your insurance company or agent from the auto dealership and give them the details of your new vehicle.

They can add your new vehicle to your policy at that time or they will issue an insurance binder until your car can be added.

If you have no other vehicles and have not established a relationship with a car insurance company or agent, it is best to do so prior to shopping for a new vehicle.

Most agents prefer that new customers come to their office in person to complete an application and possibly put down a deposit.

What information do I need to provide to obtain a car insurance policy?

When going to your agent’s office or calling your insurance company, there are several important pieces of information that you will be required to provide.

Here is a list of all the information you need to provide:

  • The make, model, and year of your new vehicle
  • The Vehicle Identification Number (VIN)
  • Who will be driving the vehicle and their ages
  • How often and how far you will be driving the vehicle each week
  • Any safety features the vehicle has like anti-theft devices and anti-lock brakes
  • Your driving history and history of recent claims

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What coverage do I need on a new vehicle?

Car insurance can be confusing, especially if you have never owned your own vehicle. Your insurance policy is like several mini-policies, each with a unique purpose, all rolled into one.

Here are the basic features of each type of auto insurance:

– Liability

Liability is the minimum insurance type required in each state.

Bodily injury liability covers damages your cause to another person and property liability covers damages you cause to their vehicle, home, or other belongings with your vehicle.

Be aware that liability does not cover any damages you incur. In order to have protection for your own damages, you will need to select additional coverage types.

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– Uninsured/Underinsured Motorist

Although most states require car insurance by law, some drivers still ignore that fact.

If you are in an accident with an uninsured driver or are a victim of a hit-and-run, your uninsured motorist policy will kick in.

If you are in an accident with someone who has very little insurance, your underinsured motorist policy can pick up the tab where the other driver’s policy leaves off.

– Personal Injury Protection (PIP)

Also known as medical payments or med pay, this coverage will pay for your medical and physical recovery bills if you are in an accident.

Med pay may also cover expenses if you need to hire help, such as a housekeeper or nanny, around your home as a result of injuries you sustained in the accident.

– Collision

If your vehicle is leased or financed, you are likely required to have collision coverage.

If your car collides with another car, a light pole, a building, a fence or anything else, this coverage will be relied upon when the bills come in.

You can select your deductible and coverage amounts with collision coverage.

– Comprehensive

Just like collision, most drivers who lease or finance their vehicle will also need this coverage.

Comprehensive coverage applies for other circumstances other than hitting another object.

Flooding, fires, hitting wildlife, and other natural disasters fall under comprehensive coverage.

– Gap

If you lease your vehicle, this coverage may already be a part of your lease.

Gap coverage pays the difference between what is still owed on your loan or lease and what your insurance company is willing to settle for if your car is totaled.

–Rental Car Reimbursement

If your vehicle is in the shop due to a claim you have made or if it has been totaled, you may need a temporary vehicle to drive.

Rental car reimbursement will help cover your rental expenses.

Selecting the right insurance policy for your new car is extremely important. Not only do you need to meet your state’s legal requirements, but also your contractual requirements.

Make sure you have full coverage at an affordable rate; enter your zip code below to compare FREE car insurance quotes today!