Auto Insurance: When Should You Get Your Own Policy?

In most cases, you'll need to get your own auto insurance when you buy a new car. If you already have car insurance for another vehicle, your new car may be covered under your existing policy for a short grace period, typically lasting between seven and 30 days. However, dealerships usually require proof of insurance before you can drive your new car home, and some may even try to upsell you on various insurance products. Therefore, it's generally recommended to purchase an insurance plan before buying a new car to ensure you have adequate coverage.

When to get auto insurance for your child

When it comes to auto insurance for your child, there are a few things to consider. In most states, auto insurance is required to drive legally. Here are some key points to help you determine when to get auto insurance for your child:

Age and Residency Requirements:

In most states, children can remain on their parents' auto insurance policy as long as their primary residence is the same as their parents. This means that if your child is away at college but still considers your home their primary residence, they can stay on your policy. However, if they have moved out permanently and established a separate residence, they will need their own policy. This is an important distinction, as insurance companies can deny claims if they find out the insured individual lives at a different address.

Cost and Risk Factors:

Adding your child to your auto insurance policy may increase your rates, especially if they are considered high-risk drivers due to their age or driving record. In such cases, it might be more cost-effective to have them get their own policy. Encourage your child to maintain a good driving record and improve their credit score, as these factors can positively impact their insurance rates.

Timing and Independence:

Getting your child their own auto insurance policy can be a step towards financial independence. While there is no one-size-fits-all answer, some parents choose to have their children get their own policy when they turn 18 or graduate from college. This allows them to take responsibility for their insurance costs and build their financial management skills.

Shopping for Insurance:

When the time comes for your child to get their own auto insurance, it's important to shop around and compare quotes from multiple insurance companies. Factors such as the make and model of the vehicle, driving record, and credit score can impact insurance rates. Additionally, consider the level of coverage needed, as state minimum requirements may not be sufficient in the event of a major accident.

In conclusion, the decision to get auto insurance for your child depends on various factors, including age, residency, cost, and your desire to promote their independence. Remember to review your insurance policy and applicable state laws to make an informed decision.

When to get auto insurance for a new car

When buying a new car, it is important to also consider your insurance needs. In most cases, it is best to purchase an insurance plan before buying a new car to ensure that you have enough coverage. This is because, in almost every state, it is illegal to drive your new vehicle off the lot without insurance.

If you already have car insurance for another vehicle, you may not need to buy another plan. Most insurance companies offer a short grace period, typically between seven and 30 days, in which your new car is covered. However, depending on the dealership and whether you are buying your new car with a loan, you may need to provide proof of insurance before taking your new car home. Dealerships will usually require proof of insurance before they allow you to leave with the car, and if you are financing your new car with a loan, your lender will also require proof of insurance.

If you are buying a vehicle from a private seller, they will usually not request proof of insurance before you take the car. However, it is important to remember that driving without insurance is illegal and can result in legal fees and high costs if you are in an accident. Therefore, it is recommended that you purchase insurance before driving your new car, even when buying from a private seller.

To get car insurance before buying a new car, you can shop around for quotes from different insurance providers. You will need to provide basic information such as the make and model of the car, your name and birthday, driver's license number, and Social Security number. You may also need the Vehicle Identification Number (VIN) of the car to finalise the insurance policy, but this is not always required to get a quote. Once you have chosen an insurance provider and purchased a policy, you can then drive your new car home, knowing that you have the appropriate coverage in place.

When to get auto insurance for a used car

If you're buying a used car from a dealership, you'll need to have auto insurance in place before you can drive it off the lot. Dealerships will require proof of insurance, so it's a good idea to shop around for a policy before closing the deal. You can get a quote and even purchase a policy without knowing the specific car's Vehicle Identification Number (VIN), but you'll need to provide this information to your chosen insurer before driving the car away.

If you already have an auto insurance policy, there's likely a grace period during which your new car will be covered. This grace period typically lasts between seven and 30 days, after which you must officially add your new car to your existing policy. It's important to check with your insurer to confirm the details of your grace period and any limitations on coverage during this time.

If you're buying a used car from a private seller, they may not ask for proof of insurance. However, driving without insurance is illegal in almost every state, and you may need to show proof of insurance when registering your vehicle. Additionally, if you get into an accident, you'll be financially responsible for any damage or injury you cause. Therefore, it's essential to have insurance in place before driving your new car, even if it's not required by the seller.

To get auto insurance for a used car, you'll need to provide some basic information, including your name, birthdate, driver's license number, and Social Security Number. You'll also need to provide the VIN of the car you're purchasing, so it's a good idea to get this information from the seller before finalising the deal. Once you have all the necessary information, you can shop around for quotes from multiple insurers to find the best rate and finalise your policy.

When to get auto insurance for a car you don't own

If you don't own a car but drive regularly, you can still get auto insurance. This is known as non-owner car insurance. This type of insurance provides liability coverage for bodily injury and property damage, meaning that it will cover you if you're liable for damages or injuries in an accident. It's important to note that non-owner car insurance doesn't cover damage to the vehicle you're driving or your own injuries after an accident.

• Borrowing cars often: If you frequently borrow a car and don't have your own insurance policy, a non-owner insurance policy can provide additional coverage. This is especially relevant if the car owner's liability limits are too low to fully cover an incident, or if you're denied coverage under their policy.
• Using a car-sharing service: A non-owner policy can provide additional liability coverage beyond what the car-sharing company provides. This ensures you have sufficient protection in case of a serious accident.
• Renting cars often: If you rent cars frequently, purchasing a non-owner insurance policy may be more cost-effective than buying liability coverage from the rental company each time. However, it's important to note that non-owner insurance typically doesn't cover physical damage to the rental car.
• Driving a company car: If your company provides a car for work purposes, you may be covered under their auto policy during work hours. However, if you need to use the car for personal errands or after work, you may need non-owner car insurance to be covered for injuries and property damage.
• Needing an SR-22 or FR-44 form: These forms may be required by your state to reinstate your driver's license after a serious conviction, such as a DUI. Insurers can file these forms on your behalf, proving that you have the minimum required insurance coverage.
• Maintaining continuous coverage: Gaps in auto insurance coverage can lead to higher rates when you shop for insurance in the future. Buying a non-owner insurance policy can help you maintain continuous coverage, even if you don't own a car at the moment.

However, there are also situations where non-owner car insurance may not be the best option:

• Borrowing a car from someone in your household: If you live with the car owner, you should be listed as a covered driver on their insurance policy. This is usually a more straightforward and cost-effective solution than purchasing a separate non-owner insurance policy.
• Borrowing the same car from someone outside your household: Car insurance companies typically require customers to list anyone who regularly drives their vehicle on their policy. In this case, you would already be covered under their policy, making a separate non-owner policy unnecessary.
• Rarely or never driving: If you only rent a car once a year or occasionally borrow a friend's car, the expense of a non-owner insurance policy may not be justifiable. In these cases, relying on the car owner's insurance policy or purchasing insurance at the rental counter may be more cost-effective.

When considering non-owner car insurance, it's important to understand the limitations. Non-owner policies typically don't include comprehensive or collision coverage, so they won't cover damage to the vehicle you're driving. Additionally, non-owner insurance is meant for occasional use, and frequent use of the same car may disqualify you from this type of policy.

When to get auto insurance for a new driver

If you're a new driver thinking about buying a car, you should also be thinking about insurance. It is usually best to buy car insurance before you get your new vehicle, although this is not always mandatory.

If you already have car insurance for another vehicle, most insurance companies offer a short grace period (typically between seven and 30 days) in which your new car is covered. However, depending on the dealership and whether you are buying your new car with a loan, you may have to provide proof of insurance before taking your new car home. Dealerships usually require proof of insurance before they allow you to leave with the car, and they may also require specific coverage types, like collision and comprehensive insurance.

If you are buying a vehicle from a private seller, they will not usually request proof of insurance before you take possession of the car. However, it is important to remember that driving without insurance is illegal and can result in legal fees and more severe consequences if you are in an accident.

Getting Proof of Insurance for a New Car

To get proof of insurance for a new car, you will typically need to provide the following information to your insurance company:

• Vehicle identification number (VIN)
• Driver's license numbers and Social Security Numbers for all drivers in the household
• Names and birthdays for all drivers in the household
• An address for the insured and an address where the car will be garaged
• Your declarations page from your most recent prior car insurance policy

It is always a good idea to shop around and compare quotes from multiple insurance providers to ensure you get the best deal. You can do this on your own or work with an independent agent who can provide quotes from multiple providers.

Timing Your Insurance Purchase

When buying a new car, it is ideal to purchase your insurance policy before taking possession of the vehicle. This ensures that you know what to expect in terms of rates and gives you the opportunity to compare prices before choosing a policy. It also protects you while driving your new car home and ensures you are complying with state legal requirements.

If you already have an insurance policy, it is important to notify your insurance provider that you are buying a new car, as your premium may increase or decrease based on the value of the new car and your previous vehicle.

In summary, for new drivers buying a car, it is generally best to purchase car insurance before taking possession of the vehicle. This will ensure compliance with legal requirements, provide financial protection, and give you peace of mind as you drive your new car home.

Frequently asked questions