Transferring Your Auto Insurance from One Car to Another
So you made the leap and got a different car. Whether it's brand new or just new to you, one of the first things you need to do before you drive it too much is to make sure it's properly insured.
Why You Should Do It
Imagine this: You intend to get your car insurance policy taken off your old car and moved to your new car, but you get busy and forget. A couple of months pass, and a storm causes a tree to fall on the roof of your car, causing severe damage. Because you only carried liability on your old car, you may not be covered for the damage. This is just one reason transferring your policy to your new vehicle is important.
If you sell your car to someone else and don't transfer your insurance to your new vehicle, you risk not having the appropriate coverage, whether it's for property damage or liability. It's also important that the name on your new vehicle's registration and your auto policy for that car match to help ensure that you aren't liable for damage that the new owner may cause to your old car.
Most of the time, whoever buys your old car will get their own insurance coverage. That way, if they are liable for an accident shortly after they buy your old car, their insurance company will cover the damages.
When You Should Do It
When you get a different car, you will have a certain amount of time as a "grace period" to transfer your insurance to your new vehicle, and that exact amount of time can vary from state to state. Even if you meet the requirements for temporary insurance, in general it only lasts 30 days, so you should contact your agent as soon as possible when you get a different vehicle, whether you kept your old one or not. You will need to provide the agent with:
- The year, make and model of the car
- The odometer reading
- The VIN number
- The registration or title
Your agent will also compare your current coverage with the coverage you want on your new vehicle. In most cases, newer vehicles will cost a little more to insure than older ones. In addition, a different make and model might cost more to insure. For example, it will cost a lot less to insure a compact car than it will to insure a high-powered "muscle" car or a high-end luxury car.
Do Your Homework
Before you buy your car, it's a smart idea to do some research so you know how much your top two or three favorite cars should cost. Once you complete that research, go online to get a quote for each one or ask your agent to compare insurance rates on your favorites. This will help you be prepared so you're not surprised if your rates are a little higher—and on a newer model, they might be. After all, if you aren't expecting higher rates, it can take some of the joy out of owning a new or "new to you" car.