Information That's Helpful To Know When Insuring A Newly Purchased Vehicle

When you buy a new vehicle, the time to insure it is before you climb behind the wheel. Whether you are driving it off a dealership lot or from the driveway of a private owner, it's important to understand the coverage your existing auto policy provides.

Grace Period

If you are buying a vehicle from a dealership, you usually have to show proof that you are currently insured. Depending on the specifics of your policy, your new vehicle may be covered temporarily. Most insurance companies give you a grace period to add a new vehicle to your existing policy.

The length of temporary coverage an insurer offers varies from a few days to a few weeks. If you aren't sure that you are going to remain with the same auto insurer, you can use the time to get price quotes from other insurance companies. Shopping different insurers never hurts, especially considering that the current rate you pay may change based on the make and model of your new vehicle.

Quotes are free, and most companies offer several different payment options. But if you decide to drop your current auto insurance carrier and go with a new company, make certain that you don't have a lapse in coverage. Even a short lapse in coverage between the time you terminate your current policy and when your new policy goes into effect can mean paying a higher premium rate.

Coverage Types

Should you decide to stay with your current insurer, review your policy to make certain that you have adequate coverage. Some makes and models are more expensive to repair or replace if they are totaled in an accident. Consequently, you may pay a higher premium rate for comprehensive and collision coverage for your new vehicle. Your liability coverage can cost you more as well.

If you are buying a new vehicle to replace an older model on which you didn't carry comprehensive and collision coverage, it's a good idea to add those coverage types to your policy. In fact, if you finance your new vehicle, the lender likely will require that you carry comprehensive and collision coverage. This is in addition to the minimum liability insurance that your state requires.

Gap Insurance

Gap insurance is another coverage to consider, especially if you are buying a brand-new vehicle. Vehicles begin to depreciate in value from the moment you drive them off the lot; therefore, you could end up paying money out of your own pocket if the vehicle is totaled just a few weeks after you buy it.

Gap coverage offers additional protection against loss on a vehicle you finance. But whatever coverage types you purchase, be sure to update your current policy or purchase a new one before your grace period expires and you find yourself uninsured. Provide the insurer with the required information so that the company can issue you a new policy.

For additional information on auto insurance, contact an insurance agency like McHugh Insurance.

Share