Many people either trade in their old automobiles or sell them separately when they buy a new car. Most people don’t need, don’t have space or cannot afford two vehicles. If this is the plan you don’t need to buy a brand new policy for your new automobile most of the time, especially when you are switching similar types of vehicles. You can just transfer car insurance to another car you just bought.
Your insurer will calculate the pro rata premiums for both vehicles and let you know if you need to pay additional premium or expect a refund. If both cars are similar you may not need to pay much additional premium to transfer insurance to another car. In some cases, you may even get little refund when the new car is cheaper to insure. You might want to read this post if you are asking is my new car automatically covered by insurance?
Your insurer would send you an endorsement that would confirm the change of vehicle on the policy. You should look out for this confirmation and chase the insurer if you don’t get it in a timely manner.
If you haven’t yet sold your old auto but planning to do so you can still make switching insurance to a new car work. Usually, insurers are happy to insure your new car for 3 – 4 days but they can extend it a bit to allow you to sell your old car. Just talk to them. Actually, in some states your current insurer insures a new vehicle you just bought for more than few days. So, check your policy’s insured autos section.
If you have a multi-car insurance policy you wouldn’t have much of a problem to add a new car on to it even though you aren’t selling anything. Even if you don’t have a multi-car policy you can still talk to your insurer and see if you can keep both cars on your policy temporarily or until renewal. Most insurers would be fine with it and charge you a bit more for the second car. Find out how much does it cost to add a car to insurance?
Is Switching Insurance to Another Car Always the Best Option?
There are circumstances that may require you to look for alternative quotes. For example, if you are exchanging your sedan with a sporty coupe your insurer may not like it and ask too much additional premium. If that is the case you don’t need to put up with it because you can find cheaper insurance for your new car and cancel the policy for the old car as soon as you sell it. You will get car insurance refund for the unused portion of the premium you paid for your old car.
If the cars switched are so different from each other a few other things have to be different too. For example, your coverage may need to be adjusted to reflect the new investment and that will reflect on the premium you need to pay. There is no harm in exploring your options. You should check your policy but your new car is normally covered for 3 – 4 days automatically by your existing policy, even if you still have the car it is written for. That is more than enough time to make the necessary arrangements for it and decide if you will switch cars, buy a new policy for the new car or ask the insurer cover both cars.
In any case, you should look for alternative auto insurance quotes at renewal especially if you find your premium is now higher than expected. This may mean that your insurer was okay with your old auto but not much fan of the new one. It happens.
Thing to Mind when Transferring Insurance to a New Car
- You will need to answer the same questions you answered for your old vehicle when you transfer insurance from one car to another. So, have your new auto’s details ready.
- Selling the old auto isn’t the only option when you want to transfer insurance to another car. If you are taking the old vehicle into storage and returning the registration documents to DMV you can switch insurance to new car.
- You may be able to persuade your insurer to keep two cars on cover for a short time without the need to switch to a multi-car policy, especially when you are trying to sell the old one.
- How long you have before you must notify your insurer of vehicle switch depends on where you live. However, the early is the better. If you are swapping the old car on your policy with a new one you may have more time to inform the insurer. However, you have only 3 – 4 days if you still own the old car on your policy.
- You would pay the premium difference from the day you bought your new car and not from the day you informed the insurer anyway. So, there isn’t much advantage in keeping quiet about it.
- You can always check to see how much more you may need to pay for insuring the new vehicle with your old policy. If you don’t like the adjusted premium you can always shop around and switch without waiting for the renewal date.
- You can revise the coverage according to your insurance needs for the new car if you want. In some cases, you may need to revise the coverage and this isn’t usually an issue. For example, you may have liability only coverage for your old clunker and you can upgrade it to full coverage if you just bought a nice auto. Obviously you will need to pay the pro-rated premium difference.
- When the switched automobiles are alike you are not likely to get surprises. But when they are a lot different you should inform the insurer as quick as possible and expect higher premiums.
- In some cases, the insurer may even refuse to transfer insurance from one car to another. This can be the case when you just bought a sports car and you have a teenage driver listed on your policy.
- You should know that vehicle insurance premiums can increase or decrease as much as twice depending on the car insured because risk classes changes. Buying a sports car can put you in high-risk category.
If you have any other question you can search on this site or online. Alternatively, you can check your policy document, call your insurer or agent or drop them e-mail. A standard auto insurance policy affords much flexibility to policyholders. But you shouldn’t expect policies to be standard in today’s market that offers so many policy options. It is always safer to check first what is covered and what is not.