How to Transfer Insurance to Your New Car: A Comprehensive Guide

Getting a new car doesn't mean starting from scratch with your insurance. You can transfer your insurance without having to start a new policy. You can also tweak your coverage to suit your new needs.

Many insurers give you up to 30 days to transfer the insurance from your old car to the new one. This way, you won't have a lapse in coverage.

It's important not to drive without insurance. You can even update your insurance with a few details about your new car before it's officially yours.

Your insurance provider might charge an administrative fee for transferring car insurance. If coverage changes, you could either pay the difference upfront or spread it across future payments.

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.

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 specific amounts 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 injured person.

It's best to request a car insurance quote before finalizing a new vehicle purchase so you know what to expect regarding rates and coverage. You can shop around, but you don't have to open a new policy.

If you plan to continue driving your old car and are adding the new vehicle to your policy, you could save money by taking advantage of multi-car insurance policies.

Remember, you're not bound to one insurer. You can always shop around for other policies. If you find better, cheaper coverage elsewhere, you can switch and cancel your car insurance at any time.

Although it's best to add your new car to your policy immediately, some insurers offer a grace period, giving you more time to complete the process if needed.

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 usually last seven to 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.

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:

• If you own the car and are not financing it, you can cover it with the minimum liability required in your state.
• If you’re financing your vehicle, your lender will likely require you to get full coverage insurance. If your existing policy only includes liability, make sure to update your policy to include collision and comprehensive insurance lest you violate your lease agreement.
• If you’re leasing a car, you will need to get your own coverage. Some leaseholders may ask you to get gap insurance.

The table below shows what insurance type is most appropriate for each.

Car insurance laws vary by state, and the minimum car insurance requirements differ depending 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.

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 with comprehensive and collision insurance may be better if you don't want to risk a substantial out-of-pocket expense.

It's a great idea to revisit how much car insurance you really need when you're transferring your insurance from your old car to your new vehicle. This is an excellent time to determine whether you should modify your policy.

When estimating the cost of transferring car insurance, several factors come into play, including:

• Your car's make and model
• Your coverage level
• Your location's risk level
• Any additional fees or charges

The table below is a handy tool that allows you to adjust for your car's make and model, age and desired coverage to get an estimated cost. Always consult with your insurance provider or agent to get the most accurate information.