Car Insurance on a New Car Purchase

by Michael on Feb 12, 2014

Photo of a Handshake at a Car Dealership

We’re in the process of buying a new car. And when you buy a new car, you need to have insurance coverage before you drive away.

If this is your first car, you’ll need to set something up with an insurance company before completing the transaction. But what if you already have a car (and insurance)?

Well, in that case, you’re probably covered. In general, existing policies provide temporary coverage of new vehicles. How temporary? That depends.

You’ll typically have somewhere between 14-30 days to let your insurance company know about your new car. But be aware that the coverage you receive will be whatever your existing car insurance policy provides.

In other words… If you’re currently driving an old clunker and only carrying liability insurance, that’s all that will automatically carry over. In that case, you’ll definitely want to talk to your agent before picking up your new ride.

We have appropriate insurance coverage (including collision and comprehensive) for a new car, so I’m not concerned about the nature of the coverage, just the timing. I thus contacted our agent for details.

Related: What Effect Does a Speeding Ticket Have on Car Insurance?

As it turns out, State Farm (at least in our area) offers 14 days of new car coverage, but… You only get full coverage for the first five days. After that, you get nine days of liability coverage. And then nothing.

This is actually toward the lower end of what I’ve seen, but it’s still more than enough to get you through a weekend. From there, just notify your agent of the purchase and they should be able to extend coverage to your new car.

In our case, I gave them the VIN and they were able to get everything set up in the system. We’re not actually picking the car up until Friday, but the new policy will be ready to go as soon as we have the car.

P.S. It won’t be long until our oldest gets his driver’s license and gets added to our coverage. He was supposed to test for it this week, but the southern ice storm has delayed that until next week.

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