After hours upon hours of research, test driving, and negotiations, you’ve finally bought a new car. Congratulations!
Your first impulse may be to head out to the open road, but resist the urge. Even if you have an existing auto insurance policy, you’ll want to make sure you know when and how your old coverage transfers to your new ride. If you don’t have a policy yet, knowing the state minimums for new car insurance is crucial!
As you figure out your next steps for insurance coverage, here are a few things to keep in mind.
How Soon Do You Need New Car Insurance?
We recommend having coverage by the time you drive a new vehicle off the lot. However, the legal requirements vary based on how you’re buying:
If You’re Working With a Lender
If you are financing your car with a loan, you’ll likely need insurance right away.
Most lenders require you to have proof of insurance before you purchase a new car. They may also require collision and comprehensive coverage beyond the minimum required in Texas. This helps your lender protect their investment.
To get a new policy, you’ll need to work with the seller to get the car’s VIN and other details.
If You’re Paying Cash
When you buy a car outright through a private sale, you don’t need to show proof of insurance. When you buy outright through a dealership, you might not need proof of insurance, but policies vary from company to company.
However, you’ll still want to make sure you’re meeting the state’s minimum insurance requirements. Many people call this basic coverage “30/60/25.” This means having at least $30,000 of liability coverage for each injured person, up to $60,000 per accident, plus $25,000 for property damage per accident.
If You Need a Grace Period
In Texas, the state permits a small grace period for a new car if you already have insurance. This gives you time to deal with your new car’s title and registration.
The timeline varies from insurer to insurer. However, if you’re replacing an old car, you’ll have between a week to a month to enjoy the same coverage you currently have on your new car. The replacement car will get the same coverage as your old car.
If you’re adding a new car to an active policy, some companies will offer a briefer window of coverage, often under a week. Your new car will have the same coverage as whichever vehicle has the most coverage on your policy.
Check the details of your policy or call your independent insurance agent to learn more.
Keep in mind that not all insurers offer a grace period, and you may not have this grace period when driving your car outside of the state.
Extending Your Current Auto Insurance Policy
If you have an existing insurance policy, don’t expect coverage to be a given, even if you know you should have a grace period. You’ll need to speak to your insurer to notify them of the purchase. Do this whether your car is brand new or new to you.
This does a few things.
First, it ensures that your provider is aware of your new ride.
Second, it allows you to confirm that your current coverage will apply to your new vehicle in the same way it would your old one. Some providers won’t extend coverage to certain types of vehicles, such as luxury vehicles or collector cars.
Third, it gives you a chance to review your current insurance levels. If you plan to be behind the wheel of your new ride more often, for example, you might want to jump to higher coverage limits.
Last, it helps you understand how much you’ll pay in the future. Don’t assume your monthly bills will be the same: if you’ve picked a low-risk ride, you may qualify for discounts based on your new car’s safety features, accident ratings, and estimated repair costs. Some providers also offer discounts for having multiple vehicles on the same policy.
Get in touch with your insurance company by calling the 1-800 number on your policy’s documents. Some insurers also allow you to do this online or with their mobile app, making it easy to provide an update even if you’re shopping on the weekend or after hours.
From there, follow up with your personal insurance agent on the next business day to confirm the details. Don’t hesitate to ask about possible discounts that can save you money on your premiums.
Getting a New Auto Insurance Policy
If you don’t have insurance or you want to use your grace period to shop around, start looking for a new insurance policy. Again, make sure any policy you choose meets the state’s minimum insurance requirements.
Beyond the basics, one of the biggest factors for most drivers is the cost of premiums. Companies decide how much to charge you based on several factors:
- The make and model of your new vehicle
- Your driving record
- Your claims history
- Your age
- How often you drive
- Your credit score
Getting multiple quotes can help you find the cheapest rates. You’ll need basic information about your new car, such as the make, model, and year, to get quotes online.
In addition, don’t forget to consider a new insurance provider’s customer service. Reviews and testimonials can help you understand what to expect from interactions with your agent.
You should always expect proof of coverage the same day you pay for your policy, allowing you to start driving right away.
Keep in mind that you may need other types of insurance based on how you’re using your car. Ridesharing professionals, for example, may need a commercial auto policy.
Get the New Car Insurance You Need
Before you start driving your new ride, get the right auto insurance for ultimate peace of mind!
At Kicker Insures Me Agency, we’re proud to provide new car insurance in addition to our other personal and business insurance offerings. With proactive service, fast turnarounds, and great pricing from a wide range of carriers, you have nothing to lose! Contact us today with questions, to notify us of policy changes, or to request a free quote.