How to Transfer Insurance to Your New Car

In most states, you need to be able to show proof of car insurance if a police officer pulls you over. Typically, you can’t drive your new car out of the lot without having coverage. However, if you're replacing one vehicle with a new one, you can transfer insurance from one car to the other.

The transfer of car insurance coverage doesn’t always have to happen immediately when you’ve bought a car. Most insurers offer a grace period, giving you time to update your insurance to include your new ride.

Although transferring insurance saves you the hassle of opening a new policy, the cost of your insurance may change. Your premium will likely be higher if your new vehicle is worth more than your old one.

• How to Transfer Insurance
• Cost of Transferring
• How Long Is the Grace Period?
• Insurance Requirements
• FAQs

It’s best to request a car insurance quote before finalizing a purchase on a new vehicle, so you know what to expect as far as rates and coverage. You can shop around, but you don’t have to open a new policy, as it’s possible to transfer your insurance from your old car to your new vehicler.

Your policy premium will probably increase if your new vehicle is worth more than your old one. The average cost of insurance is $1,424 per year. That's for a full-coverage policy with 100/300/100 liability limits.

The 100/300/100 limits mean that if you cause an accident, your insurance can pay up to certain limits that correspond with those numbers. They’d pay up to $100,000 for property damage (such as the cost of repairs) for the other driver’s vehicle, $300,000 for the other driver’s medical expenses, and a cap of $100,000 for each person injured.

Your actual rate may vary, depending on several other factors such as your car’s make, model and year. Increasing your coverage limits can increase your premium as well.

If you have several cars insured through the same company, you could save money by taking advantage of a multi-vehicle discount. You can ask if your insurer offers this benefit.

Although it’s best to have your new car added to your policy immediately, some insurers offer a grace period, which gives you more time to complete the process if you need it.

Generally, a grace period is the amount of time past your due date that you have to pay your premium before your coverage lapses. When you buy a new car, the grace period refers to how much time you have to tell your insurer about your purchase and update your policy.

Grace periods vary depending on the insurer, but it’s usually between 7–30 days. For example, American Family provides a 14-day grace period, while Progressive’s is 30 days. Check with your insurer to find out how long your grace period is.

It's a great idea to revisit your coverage requirements when you're transferring your insurance from your old car to your new vehicle. This is an excellent way to determine if you should modify your policy.

Car insurance laws vary by state, and the minimum overage requirements depend on where you live. Most state minimum policies only require liability coverage. With liability-only coverage, your insurance won’t cover the cost of repairs if your vehicle is damaged.

You may want to consider increasing your coverage limits, especially if you bought a high-value vehicle. For example, if your collision insurance covers up to $50,000, but your repair costs after an accident turn out to be $75,000, you’ll pay the difference out of your pocket.

Getting a full-coverage policy that includes comprehensive and collision insurance may be a better option if you don’t want to risk a substantial out-of-pocket expense.

The kind of coverage you need is also dependent on whether you’ve fully paid for your car or if you financed or leased it. The table below shows what insurance type is most appropriate for each.

You can transfer insurance from one car to another when you purchase a new vehicle. Here are the most commonly asked questions about how this process works.