Should You Change Your Auto Insurance When You Get A New Car?
When you get a new car, it's important to make sure you have the right insurance. You worked hard to make that purchase and want to protect it. Here's what you need to know.
Check Your Coverages
When you buy a new car, it's important to check your coverages. The most important are your collision and comprehensive coverages. These are what pay for damage to your car. Many drivers of older cars drop these coverages to save money on insuring a car that isn't worth much, but you'll probably want to add them back if you have a new car.
Another coverage you might want to consider is gap insurance. Gap insurance pays the difference between what your car is worth and what you owe on your car loan. Otherwise, if your car is totaled, you have to pay your loan in full immediately and make up any amount insurance doesn't cover. This is a common risk if you have a longer car loan as the initial drop in the value of a new car can happen faster than you pay down the loan.
Know When You Have to Add Your New Vehicle
When you buy a new vehicle, you usually want to add it before you drive out of the dealership. This makes sure your new car is insured from the moment you take possession. Technically, your insurance company might cover a car you just bought for a few days before you actually add it to your policy, but you don't want to risk missing the deadline.
Know When to Drop Coverage on Your Old Vehicle
If you're selling or trading in your old vehicle, you'll want to drop insurance coverage on it. This is usually when you complete the paperwork for the sale.
What you don't want to do is drop coverage while you're waiting to sell your old car. Even if you leave it in your garage and drive your new car, it won't be covered if something happens to it in the garage or if you let a buyer test drive it.
Shop for Rates
Each make and model of car has different insurance costs, but each insurance company also adjusts the costs differently. Therefore, if your old insurance was always the cheapest for your old car, it might not be the cheapest for the new type of car that you're buying.
To learn more about what to do with your auto insurance when you get a new car, contact a local insurance company today.