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byAngele Doakes - Licensed Property & Casualty Broker
Angele Doakes - Licensed Property & Casualty Broker
Operations Sales Manager, Property & Casualty
Updated April 21, 2021|6 min read
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If you’re shopping for a new car and you don’t have an existing car insurance policy, you need to make sure you have insurance coverage before you drive your new ride home. Yes, even if you’ve just bought a brand new vehicle, you must have car insurance before you can drive it off the lot.
But how do you make sure your new car insurance policy starts the same day you drive home with your new car, and what do you do if you don’t know which specific vehicle you’re driving?
Ready to shop car insurance?
The good news is that you can shop around for car insurance before you have your new car, and, even if you don’t have your new car’s vehicle identification number (VIN) yet, you can still give a broker or agent all your other information so the policy is ready to go as soon as you find out what car you’re buying. Unlike other insurance products, like life insurance, buying car insurance can be completed quickly, without a waiting period. Here’s what you need to know about setting up a car insurance policy before you buy a vehicle.
If you’re buying a car and don’t already have a policy, you can shop for one ahead of time and make sure it starts the day you take your new car home
Even without a VIN, you can make sure you’re ready to go with a policy so you can start it straight from the dealership
Most dealerships won’t let you drive off the lot without showing proof of insurance
If you have an existing car insurance policy, it likely includes a grace period that gives you temporary coverage for a week or more before you have to officially add your new car to your policy
When you’re shopping for car insurance coverage, whether you’re applying and comparing quotes on your own or going through an independent broker to compare quotes from multiple insurance companies, you’ll need to submit some basic information in order to get an accurate quote. That info includes:
Names and birthdays for all drivers in the household
Drivers license numbers and social security numbers for all drivers in the household
VINs for all vehicles
An address for the insured and an address where the car will be garaged (this is usually the same place)
Your declarations page from your most recent prior car insurance policy
But what if you’re buying your very first vehicle, and you’ve never had a car, or a car insurance policy, before? In order to get accurate quoted car insurance rates, and to put your policy in force, you’ll need specifics about your vehicle — but you may be able to get quotes using just the make and model of the car you plan on buying.
If you’re working with an independent broker, you can give them all your information except the car’s VIN, and get your policy ready to put in place as soon as you pick a specific vehicle. That way you can make sure you’re ready to officially buy your car insurance policy the same day you drive home your new car.
If you do know the specific vehicle you’re buying, ask the dealer or seller for the VIN so you can buy car insurance ahead of time. Just make sure you set the policy’s start date to the day you’re taking home the car, so you’re covered for your drive home.
When you’re shopping for car insurance coverage, you can choose a start date for your policy that’s weeks, sometimes even months away — you may even get a small discount on your premium for shopping ahead of time.
➞ Learn more about how to buy car insurance
Ready to shop car insurance?
If you don’t have an existing car insurance policy already, you should not drive your new car home until you buy car insurance to protect it and you. At least a minimum amount of car insurance coverage is required in almost every state in the U.S. If you’re caught driving without insurance in a state where it’s required, you could face fines or having your license suspended.
If you have an accident while driving without insurance coverage, the penalties are even more serious. This applies no matter what — even if you just bought a car 20 minutes ago and you’re driving it home from the dealership.
Driving without insurance also means you’ll have a gap in your insurance history when you go to apply for coverage again. Having a lapse in coverage signals to car insurance companies that you’re more of a risk to insure, and will raise your future premium.
Even in the states that don’t require drivers to have car insurance, you’re financially responsible for any damage or injury you cause in an accident. So if you’re driving home with a new car and you have an at-fault accident, without liability coverage to protect you, you’ll be footing the bill for damage to the other driver’s car as well as their medical bills.
As we mentioned above, you should make sure you have car insurance before you take home your new vehicle, even if you have to call your broker from the dealership to give them the final information. But things are a little different if you’re buying a car while you have an existing insurance policy.
If you have an active car insurance policy, it may include a grace period for new cars. That means that your current car insurance policy automatically extends to cover a new car you buy even before you officially add it to your policy.
If your current car insurance policy includes this coverage, it will be temporary, usually one week to 30 days, after which you must officially add your new car to your current policy or it won’t be covered.
This means you’ll be covered when you drive home from the dealership and for a few days or weeks following the purchase, but you should inform your car insurance company about your new vehicle as soon as possible.
There also may be limitations to this temporary coverage — your insurance might only cover a new car if it’s replacing your current ride, not if you’re adding another vehicle to your policy but keeping the old one. And the temporary coverage may or may not include comprehensive and collision coverage, depending on what coverage you have in your existing policy.
Before you drive your new car home, check with your current insurer to make sure they’ll extend temporary coverage to your new vehicle. If they do, find out how long you have to officially add the car to your policy, and if they don’t, you’ll have to make arrangements to add the car to your policy before you drive it off the lot.
Yes — getting car insurance is usually a quick and simple process. It’s always a good idea to devote some time to shopping around for car insurance and comparing quotes from different companies, but even so, purchasing car insurance can often be done within 24 hours. To make the process of getting car insurance as streamlined as possible:
Gather all the basic info you’ll need for the application, including license numbers and birthdays for every driver in your household
Understand how much of each type of coverage you need for yourself and your vehicle
Research car insurance companies, including reviews and scores from third-party researchers to make sure you’re choosing a company with solid ratings
As we’ve already mentioned, if you don’t already have an existing car insurance policy or your existing car insurance policy doesn’t extend coverage to newly-purchased vehicles, you’ll need to get car insurance ahead of time, so your coverage begins the day you pick up your car from the seller or dealership.
➞ Learn more about how long it takes to get car insurance
Yes, another reason you need to figure out your car insurance coverage before you drive your new car off the lot is because car dealerships typically require you to show proof of insurance when purchasing a new or used car.
You can have your insurance company fax or email proof of insurance to the dealership, or you may be able to show your insurance card. If you’re financing your new car with a car loan through a bank or another financial institution, they’ll also require proof of insurance.
Your lender may also require specific coverage, like collision and comprehensive. After all, they’re partial owners of your car until you pay off your loan, and they want to make sure their investment is protected.
If you buy a car at a dealership and don’t yet have auto insurance, you can always leave the car there, purchase car insurance, have proof of insurance faxed over and pick up the vehicle and drive away — you can even do this all in the same day!
If you’re buying a car from a dealership, you need car insurance before you can drive the car off the lot. If you already have auto insurance on another vehicle, you typically have between seven and 30 days to let your insurance company know about the new car, during which it will be automatically covered by your existing policy.
No, it is illegal to drive a car without insurance even if you just bought it. If you buy a car from a dealership, you’ll need insurance before you can drive it out of the lot, and if you’re leasing or financing your vehicle, your lienholder or lessor will also require your car to be insured before it can be driven.
You can get car insurance before you buy a new car through an insurance company or an independent insurance marketplace like Policygenius. Even if you don’t have your car’s vehicle identification number (VIN), you can still give a broker or agent all the rest of your information so your policy is in force by the time you purchase your new car.
If you’re buying a used car in a private transaction, the seller may not ask you for proof of insurance before you take the car and title home with you. But you should still have coverage — driving a car without any insurance is illegal in almost every state, and you may also need to show proof of insurance when you register your car. Plus, if you get in an accident on the way home from the purchase, you’ll be just as financially liable as if you had owned the car for years.
How to tell if you should buy your own car insurance.
Updated April 21, 2021 | 6 min read
From Alaska to California and Indiana to New York, each state has minimum car insurance requirements. Find your state's guidelines so you're protected.