When you buy a new car, it's important to make sure you have auto insurance to protect your investment. Car insurance works just about the same for all personal cars. But there are a few things you need to check before you drive off the lot.
When Do You Need To Add Your New Car To Your Car Insurance Policy?
If you didn't previously have auto insurance — if you are a first-time car buyer or lived where you didn't need a car — you need to purchase coverage before you take possession of the car. If you get into an accident as you're driving off the lot and don't have insurance yet, you won't be covered. Plus, you may be in violation of state laws requiring insurance.
If you already have car insurance, it's a good idea to buy coverage for your new vehicle while you're finishing up the paperwork. If you drive off the lot without having added your new car to your coverage, what happens next depends on your insurance company. Some give you a set number of days to add a new car, while others won't cover you until you formally add it.
What If Your New Car is Worth More Than Your Old Car?
Almost any car purchase will mean a change in your car insurance rates, since the value, age, and class of your vehicle all factor in. If you're relying on a grace period instead of changing your insurance before you take possession of your new car, check your insurance policy for any restrictions on the value or type of car your insurance will cover during the grace period.
Did You Drop Comprehensive And Collision Coverage?
Some drivers decide it makes financial sense to not carry comprehensive and collision coverage on older cars. If you did this, you will not have any coverage for theft or damage to your new car until you add comprehensive and collision back to your car insurance policy.
What Value Are You Covered For?
You've probably heard that the value of a new car drops as soon as you drive off the lot. If you're involved in an accident — even on the same day as you purchased your vehicle — your insurance company generally pays the current value, and not what you paid. Ask your DJW Insurance agent about new car replacement value if you want to be covered for the purchase price.
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