Why You Should Arrange Insurance Before Buying A Car

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Insurance 101: Tips and Tricks to Choosing the Right Policy

Since my parents always added me to their auto insurance policy when I was a teenager, I never learned how to make educated insurance policy decisions. When I moved out of my parents house at the age of 25 and it was time to get my own policy, I was overwhelmed with all of the decisions I had to make. Thankfully, my parents were eager to teach me what each insurance coverage option meant and what the best choices were for me. I learned a lot about insurance during this experience, and I am eager to share what I learned with others on my new blog. I also plan to include many tips on choosing health and homeowners insurance policies, so check back often if you want to learn a little more about insurance!


Why You Should Arrange Insurance Before Buying A Car

1 July 2022
 Categories: Insurance, Blog

Once you have settled on the car you want to buy, you should have car insurance before driving off the dealership. The consequences of owning or driving a car without insurance coverage are dire. The following are reasons to have insurance in place by the time you complete the car purchase paperwork.

A Loss Can Occur at Any Time

The most obvious reason to buy car insurance immediately is to protect you in case something happens immediately after purchase. For example:

  • You might hit someone (another car or pedestrian) within the first day of the car's purchase
  • A tree might fall on your car on the first night
  • Someone might steal the car on the first night

Unlike other forms of insurance, auto insurance goes into effect immediately after the insurance company processes your payment. Buy car insurance early enough, so it's in effect by the time you drive from the dealership.

The Existing Coverage Might Be Inadequate

Some car insurance companies will extend your existing coverage to your new car for a limited period. For example, you may get a couple of weeks' extension to allow you to process the new car's coverage. However, the coverage limit for the new car will be the same as the existing coverage.

Say you have comprehensive coverage worth $20,000 on an old car and buy a $50,000 car. The insurance company will only compensate you a maximum of $20,000 if someone steals your car or an accident totals it. The only way to ensure maximum coverage of $50,000 is to buy insurance.

Driving Without Insurance Is Illegal

Almost all states require motorists to carry auto insurance at all times. You don't know when the authorities might request proof of insurance; they might even stop you on the way home from the dealership. Driving without insurance attracts traffic tickets, fines, and driving license suspension, among other penalties. Have coverage in place to avoid such complications.

Financiers and Dealerships Need Insurance

Lastly, some car dealerships and financers require auto insurance before you can drive your new acquisition out of the lot. Remember, the financier invests in you when they loan you money to buy the car. Insurance coverage means the financer can recoup its investment even if something happens to your car and you cannot repay the car loan.

Talk to an insurance agent for all your coverage needs. The agent can help you arrange and get coverage within the same day. For more information on an insurance quote, contact a professional near you.