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


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Updated: May 20, 2024

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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.

Key Takeaways

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You don't have to open a new car insurance policy when buying a new car. You can transfer your coverage from your previous vehicle to the new one.

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Transferring your insurance to your new car is the perfect opportunity to reassess your coverage needs. You may want to add comprehensive, collision or gap insurance or increase your coverage limits.

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Insurers typically offer a seven to 30-day grace period for you to inform them of your purchase and update your policy.

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How to Transfer Insurance to a New Car

Transferring your insurance to a new car doesn't have to be complicated or intimidating. Usually, all you need to do is call your agent. Some insurers also allow you to modify your policy online. To get an updated quote, you will need to provide your new vehicle's details, like its VIN, make, model and year.

Given that you're insuring an entirely new vehicle, and premiums are significantly influenced by the car's value, make and model, you'll need a fresh quote from your car insurance provider.

This is also a great time to reevaluate your coverage — you may want to increase limits or add other types of insurance, to protect your finances in case of an accident. Many people transfer their policy as-is, but if your new car has a higher value than your previous one, you might end up paying for repairs out of pocket if you sustain damages.

1
Get in touch with your insurance provider

A phone call should be all it takes to let your insurer know you're buying a new car. It's best to get in touch with them even before your purchase is complete. This increases the likelihood of completing the transfer before your new vehicle is released. In some states, you need proof of insurance for your car registration.

2
Reassess your coverage needs
  • Since you're in the process of transferring your policy, it's an excellent time to see if there are any beneficial changes you could make for the new vehicle. For example, consider reevaluating whether your coverage limits are appropriate for your new car.
  • If your new car has a higher value than your previous vehicle, you may need to increase your coverage limits. Consider adding collision and comprehensive insurance to ensure your policy can cover the cost of repairs if your car is damaged.
  • And if you're taking a step to finance your new vehicle, many lenders will likely ask for comprehensive insurance.
  • You might also consider purchasing gap insurance, which can help pay the difference between your car's market value and what you owe on your vehicle if it gets totaled.
3
Get an updated quote

It's a safe assumption that your rates will increase if your new car is worth more than your old one. Your insurer needs the following information to make an accurate quote:

  • Vehicle Identification Number (VIN)
  • Safety features
  • Make and model
  • Model year

Let your insurance provider know if anyone in your household will be driving your car. Many insurance companies require all household members to be listed as insured drivers.

4
Ask about additional costs
  • If there is an increase in your rates, ask your insurer how they will bill you for the difference. Some insurers can spread the amount across monthly payments, while others may require you to pay upfront.
  • Some companies charge an administrative fee for processing insurance transfers to new vehicles. The fees vary between providers.
5
Compare quotes from other insurers
  • Besides getting an updated quote from your current insurer, gathering and comparing quotes from other insurers is also a good idea. This will help you see if you're getting the best possible deal.
  • Whether you're comfortable sticking with your current insurer or you'd like to jump to a new provider, now is the time to complete the process. It's a good idea to get documentation for your new or modified policy to reflect coverage for your new vehicle and other changes you may have made.
  • If you've decided to switch to switch car insurance companies, you can use online calculators to get a ballpark figure.
6
Make sure your insurance policy is updated and active
  • Ensure your insurance is active and updated before driving off with your new car. Get a written note from your insurer about your car's coverage, especially after changes.
  • Some people insure two cars at once to avoid driving uninsured. If you're using your old car and buying a new one, insure the new car before removing your old vehicle.

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How Much Does It Cost to Transfer Insurance to Another Car?

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.

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If you find your premium rates too expensive after getting an updated quote, remember that you can always shop around for other policies.

How Much Time Do You Have to Transfer Insurance to Your New Car?

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, Progressive provides a 30 day grace period. Check with your insurer to find out how long your grace period is.

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HOW LONG DOES A CAR INSURANCE GRACE PERIOD LAST?

When you purchase a new car, auto insurance companies usually give you a grace period of seven to 30 days to update your policy. You may drive your new car even if you haven’t officially added it to your policy yet. You may be illegally driving an uninsured vehicle if you continue to use your car after the grace period without transferring policies or purchasing a new one.

Insurance Requirements for New Cars

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.

Required Coverage
Minimum Coverage
Comprehensive
Collision

Financed vehicle

Leased vehicle

Owned vehicle

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.

Estimate Cost of Transferring Car Insurance

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.

Make Model
Annual Premium

Acura MDX

$1,244

Acura MDX

$634

Acura MDX

$1,252

Acura MDX

$629

Acura MDX

$1,235

Acura MDX

$598

Acura MDX

$1,270

Acura MDX

$620