Paul Sanchez
Auto insurance is a standard expense that comes with owning a car. In Ontario, Canada, it is mandatory for every registered car to have car insurance. It is usually best to buy car insurance before getting a new vehicle. If you already have car insurance for another vehicle, you may not need to buy another plan as most insurance companies offer a short grace period in which your new car is covered. However, if you are buying a new car with a loan, you may have to provide proof of insurance before taking your new car home. When buying auto insurance, it is important to use a licensed insurance company, agent, or broker to avoid fraud.
What You'll Learn
Before buying a car
It is important to have auto insurance before buying a car. While it is not required in all states, it is illegal to drive without insurance in every state except New Hampshire and Virginia. Therefore, you will need to have at least the minimum liability insurance before driving your new car.
If you already have car insurance, you may not need to buy another plan. Most insurance companies offer a grace period, typically lasting between seven and 30 days, during which your new car will be covered. However, it is important to note that this grace period only includes the level of coverage you had on your previous vehicle. If you are buying a more valuable vehicle or taking out a loan, you may be required to have full coverage, which includes comprehensive and collision insurance.
If you are purchasing a car from a dealership, they will likely require proof of insurance before allowing you to take the car home. Dealerships can usually provide a temporary insurance policy, but the length of coverage and the details of the policy can vary. On the other hand, if you are buying a vehicle from a private seller, they usually will not request proof of insurance. However, driving without insurance is illegal and can result in legal fees and high costs in the event of an accident.
When shopping for auto insurance, it is a good idea to compare quotes from multiple insurers to find the best rate. You can do this online, in person, or over the phone. To get an accurate quote, you will need to provide general personal information, such as your name, address, birth date, and ZIP code, as well as information about the vehicle, including the year, make, and model.
Once you have selected an insurer, you can choose a start date for your policy to coincide with the day you plan to take possession of your new car. This ensures that you have the necessary coverage in place before driving your new vehicle.
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After buying a car
If you already have car insurance for another vehicle, you may be covered by a grace period, typically lasting from seven to 30 days, depending on your provider. However, this grace period usually only includes the level of coverage you had on your previous vehicle. If your new car is worth more, or if you are taking out a loan, you may be required to have full coverage, which includes comprehensive and collision insurance.
If you are staying with the same insurance provider, you will need to notify them that you are buying a new car and provide them with certain information, including the Vehicle Identification Number (VIN). If you are switching providers, it is best to buy your new policy before canceling your current one to avoid driving uninsured. You can get quotes from different providers by providing them with the VIN of the vehicle and some personal information, such as the full names and birth dates of all drivers on the policy and your Social Security number.
When choosing a new insurance policy, it is important to understand the various coverages available. There are typically six main types of car insurance, including personal injury protection, medical payment coverage, comprehensive insurance, collision insurance, liability insurance, and uninsured and underinsured motorist coverage. The type of insurance you need will depend on your specific situation and the requirements of your state or territory.
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Vehicle information
Vehicle Ownership and Identification
You will need to provide proof of vehicle ownership, which can be in the form of a vehicle registration document or title. This establishes your legal right to insure the vehicle. The Vehicle Identification Number (VIN) is also essential, as it serves as a unique identifier for your car. You can typically find the VIN on your registration card, etched near the windshield, or on the driver's side door.
Vehicle Make, Model, and Year
Insurance providers will ask for the make, model, and year of your vehicle. This information helps them assess the vehicle's value, safety features, and theft rates, all of which can impact your insurance rates.
Vehicle Safety and Security Features
Insurance companies often offer discounts for safety and anti-theft features. Be sure to mention safety features such as passive restraint systems, anti-lock brakes, and airbag capabilities. Additionally, if your car has anti-theft devices like GPS trackers, be sure to include that in your application.
Vehicle Mileage
Your insurer will need to know the current mileage on your vehicle's odometer, as well as an estimate of how many miles you expect to drive annually. This information helps them understand your vehicle usage and can impact your coverage needs and insurance rates.
Vehicle Usage and Parking
Inform your insurance provider about any business-related use of your personal vehicle. Additionally, provide details on where your vehicle is typically parked or garaged, as this can impact your insurance quotes.
Vehicle History
If you are switching insurers, be prepared to provide details about your previous insurer and the dates of coverage. It is also helpful to have a Claims Loss History letter, which provides information about any past claims or accidents associated with your vehicle.
Vehicle Financing Information
If your vehicle is financed, you will need to provide the loss payee clause, which outlines the financing entity's interest in the vehicle.
In summary, providing comprehensive vehicle information is essential for obtaining accurate auto insurance quotes and ensuring you have the appropriate coverage for your needs.
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Driver information
Personal Details
Insurers will ask for the full names and birth dates of all drivers listed on the policy. This information helps identify the individuals who will be operating the vehicle(s) and allows the insurance company to assess their driving history and experience.
Social Security Numbers
Social Security numbers are often requested for all drivers on the policy. These numbers serve as unique identifiers and enable insurance companies to conduct thorough background checks on each driver's driving record and history.
Driver's Licence Information
The date of obtaining a driver's licence, including G1/G2/G, is an essential piece of information. It helps insurance companies understand the driving experience and history of each driver. Additionally, completion of a recognised driver training course can be a positive factor in the application process.
Driving History
Insurance companies delve into the driving history of each driver listed on the policy. This includes information about accidents, tickets, and claims. Being transparent about your driving record is crucial, as any discrepancies can impact your insurance rates or even result in policy cancellation.
Insurance History
Your insurance history is another critical aspect of driver information. Insurance companies will ask about your current insurance status, the number of years of continuous insurance coverage, and any previous insurance cancellations. This information helps them assess your risk as a driver and determine the appropriate premiums.
Additional Information
In some cases, insurance companies may request additional details to determine eligibility for discounts. For example, retirees or individuals with multiple vehicles or policies may qualify for specific discounts offered by the insurer.
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Insurance history
Auto insurance has been a major part of our daily lives for decades, with most states in the US requiring drivers to have liability insurance at a minimum. However, this wasn't always the case. The history of auto insurance dates back to the time of the Founding Fathers, with Benjamin Franklin playing an unexpected role in its development.
The Benjamin Franklin Connection
While Benjamin Franklin wasn't driving an automobile, as they hadn't been invented yet, he did create the Philadelphia Contributionship in 1751. This was the first company within the American colonies to offer fire insurance. The basics of this insurance were similar to modern car insurance, with everyone paying into the insurance plan, and the money being used for repairs in the event of a fire. Thus, Franklin became the "Founding Father" of modern insurance, which would eventually lead to car insurance.
The First Automobile Insurance Policy
The first real automobile insurance policy was taken out in 1897 by Gilbert J. Loomis in Dayton, Ohio. Loomis' car insurance plan was basic by modern standards, essentially offering early liability insurance that protected him if his car damaged property or harmed someone. This marked the beginning of car insurance as a trend, with insurance companies refining their products and services over the coming years.
Insurance Goes Mainstream
In the early 1900s, insurance began to catch on, with new plans introduced to protect against fire and automobile theft. Starting in 1912, insurance companies offered bundled insurance plans that combined automotive, liability, and fire insurance. By this time, insurance was becoming increasingly popular with consumers.
Massachusetts Leads the Way
In the early days of insurance, purchasing car insurance was completely optional. However, this began to change in 1927 when Massachusetts became the first state to require drivers to have liability insurance. It would take many decades for this requirement to be implemented throughout the rest of the United States.
The Safe Driver Connection
The development of car insurance was closely tied to the emergence of safer driving practices. The first driver's license requirement was introduced in 1903, and it wasn't until 1927 that a state mandated a licensing examination. By 1930, only 24 states required drivers to have a license, and only 15 of those licenses mandated an examination. It took significant time for these regulations to become mandatory, and there was a fierce debate over seatbelt laws in the 1980s.
The Internet Revolution
The mid-1990s marked a significant shift in the insurance industry with the advent of the internet. Insurance companies could now provide quotes to drivers online, leading to an increase in the number of car insurance providers. Drivers benefited from having more insurance options and the ability to easily compare quotes from multiple providers.
Today, auto insurance continues to evolve with technological advancements, such as devices that transmit information about a driver's behaviour back to the insurance company, potentially resulting in discounts on premiums.
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Frequently asked questions
It is usually best to buy auto insurance before getting your new vehicle. If you already have car insurance for another vehicle, you may not need to buy another plan as most insurance companies offer a short grace period in which your new car is covered.
You will need proof of insurance before they allow you to leave with the car. In some cases, you may be able to call an insurance representative to find coverage right from the dealership.
Private sellers will not usually request proof of insurance before you leave with the car, but remember that driving without insurance is illegal and could cost you a lot in legal fees if you are in an accident.
