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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In a nutshell...

If the time has come to kiss your old vehicle goodbye, it’s important to prepare yourself for the car-buying process.

Many consumers avoid dealerships at all costs, but if you’re a skilled negotiator, you can walk off the lot feeling like you got the better end of the deal.

Unfortunately, some car buyers are so focused on trying to get the best interest rates and sales price that they overlook the importance of getting their insurance in order.

Luckily, if you have an existing insurance policy, transferring your insurance to a new car isn’t all that difficult.

Here’s what you should do when you notify the insurer that you’ve purchased a new vehicleEnter your zip code above to get FREE car insurance quotes today!

Get Quotes for Cars You Like Before You Go Car Shopping

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Arming yourself with information is an effective way to choose the right car when you’re strolling up and down the lot. It helps to get quotes on a handful of choice models that you’re considering.

You don’t have to insure your new car through your existing provider, but the easiest way to determine if insurance expenses on a certain model are high is to ask your current insurer for a quote.

Call your agent, give them a list of the models you’d like quotes on, and find out how much your personalized rates will be for a specific car.

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Review Your Coverage Limits and Options

When you signing paperwork after you’ve negotiated a sales price, the finance officer will ask you to provide proof of insurance.

Since your current coverage does extend to the new car, it’s important to verify how much coverage you have before you make the trip, which makes all of the difference if you need to add coverage to satisfy lending requirements.

Buyers who are financing or leasing must have liability insurance and the following coverage types:

  • Comprehensive – Pays for physical damage to your car caused by fire, theft, flood, and other non-collision perils
  • Collision – Pays for physical damage to your car if it’s damaged in a collision or rollover accident
  • GAP – Pays for the difference between the balance of your loan and the value of the car

If you’re paying cash for the car, you’re only required to show that you have the coverage that’s required by the state.

Find Out How Long Your Insurance Automatically Covers Your New Car

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Under your contract, the company will explain exactly how long your coverage will temporarily cover a new car.

If you’re trading the car in, the standard contract typically covers the replacement car until the end of the term. You will receive the same coverage that you carried on the old vehicle.

You will have between fourteen and thirty days to contact your company and add the car. During that time, you will get the broadest form of coverage on the policy.

If you don’t have full coverage, you will automatically get full coverage for four days.

Contact Your Insurer and Make the Changes

Transferring your coverage isn’t difficult at all. You’ll need the VIN, features, and odometer reading of the vehicle to add it.

You will also be asked for the purchase date and the loss payee clause if the car is financed. All of this is important so the company can notify the state and your lender that you have coverage.

It’s critical that you contact your insurer promptly when you’re transferring your coverage. If you’re not happy with your new rate, continue your policy until you can find a better deal.

Enter your zip code below for FREE car insurance quotes today!