Auto Insurance

Do I Need Car Insurance Immediately

Nearly every state requires drivers to hold “mandatory minimum” liability coverage. Drivers must be insured to drive their cars off the lot; however, they have options when buying insurance for a new car. Car buyers can show proof of insurance with a grace period to add their new vehicle or purchase a new policy, most of which offer immediate coverage.

Immediate Car Insurance

In most instances, you can purchase a car without insurance. The catch is, If you opt not to buy an insurance policy ahead of time, you can’t legally drive the vehicle home without coverage. However, this isn’t always true. Several states do not require vehicle owners to purchase insurance, though the driver does so at their own physical and financial risk. Read on to understand the finer points of when and why to buy an insurance policy for a new vehicle.

Do I Need Insurance When I Buy a Car?

Buying a car requires proof of insurance or financial responsibility in nearly every state. Car dealerships typically need buyers to verify existing coverage or purchase a policy to insure their new car before driving it off the lot. Drivers may purchase a vehicle from a private seller without insurance at their own risk.

Depending on their state’s requirements, buyers can choose from various coverage types. Generally, car buyers want to avoid driving uninsured or letting their coverage lapse, leading to exorbitant repair costs, higher insurance rates, or litigation.

What Kind of Coverage Do I Need?

States generally require every driver to maintain “mandatory minimum” coverage, which covers a driver’s liability for bodily injury or property damage affecting the other driver in the case of an accident. All states except Florida require minimum bodily injury coverage, while drivers in all 50 states must maintain property damage liability coverage. 

New Hampshire does not require car insurance or mandatory minimum liability; however, a driver who causes an accident in New Hampshire must show proof of insurance or the ability to pay up to $50,000 and up to $25,000 in medical and car repair bills, respectively. Additionally, Virginia does not require liability insurance but charges an annual fee for being uninsured. 

Are the Rates for Full Coverage Auto Insurance Expensive?

Insurance carriers offer coverage at various price points, including affordable options for drivers to meet minimum liability requirements in their state. According to the National Association of Insurance Commissioners, purchasing liability insurance in the U.S. costs $650 on average in 2022. Factors affecting insurance rates include location, accident history, and vehicle type.  

Can I Drive a Car Without Insurance if I Just Bought It?

Drivers should be insured to drive their car home, whether it is new or used. Buyers can choose their preferred method of securing insurance for their brand-new car. Drivers with an existing policy can simply show proof of coverage to drive the car home, though they will still need to add their new car by the end of the grace period. They may also research insurance options in advance and purchase a new policy at the same time as their car. 

What if I Want to Buy a Used Car?

While private sellers may not require proof of insurance, buyers must maintain minimum liability insurance to get behind the wheel in all states except New Hampshire and Virginia. Obtaining insurance for a pre-owned vehicle is generally the same as a new car.  

Do Car Dealerships Require Proof of Insurance?

Dealerships do require proof of insurance when buying a new car. Drivers may purchase their own policy ahead of time or buy coverage on the spot for their new car. Many dealerships maintain partnerships with major auto insurance carriers to assist customers who need immediate coverage. Policyholders may enjoy a grace period before coverage kicks in on the new car.  

How Soon After Buying a Car Do You Need Insurance?

Drivers need insurance immediately after purchasing their car; however, most insurance providers allow drivers a grace period to add their new vehicle to an existing policy. If you are buying a car and are already insured, you’ll need to show proof of insurance at the dealership. 

Drivers can inform insurance carriers that they plan to purchase a new car and add it to their policy ahead of time. Alternately, dealerships will work with customers to secure same-day coverage and drive their new car off the lot.      

How Do I Know If I Have a Grace Period?

Drivers should contact their insurance provider to learn whether their policy includes a grace period for new vehicles. While individual policies vary, most carriers offer a grace period of 7-30 days to pair your new car and your new coverage. Drivers must report their new car within the grace period to obtain coverage for that vehicle. 

How Long Does it Take to Get Car Insurance?

The time it takes to apply for car insurance ranges from a few minutes to a few hours. Liability coverage, required in nearly every state, typically goes into effect immediately. Policies that offer more coverage, like collision insurance, may require higher rates based on factors like a driver’s accident history. 

Collision insurance covers the repair or replacement of your car if it is damaged in an accident. Collision coverage is required in most cases if a customer is leasing or financing their new car. Most providers still offer immediate collision or comprehensive coverage for new customers.

Can I Buy Insurance Without a Car?

You can and should research coverage options before you buy a new car. Insurance carriers typically provide quotes for specific makes and models of cars. You can then purchase the new car and a new policy simultaneously. 

Can You Get Car Insurance the Same Day?

Most insurance providers offer same-day coverage at no extra charge. Major national insurance carriers are more likely to offer same-day enrollment than local companies. Buyers should ensure they understand the terms of immediate coverage, including whether it involves a grace period. Red flags would include extra fees or contingency plans for same-day coverage.

Getting Proof of Insurance for a New Car

Drivers can obtain proof of insurance to buy a new car in several ways. One option for those already insured is to bring the insurance card you keep in your vehicle or carry it in your wallet to show the seller. You may also send digital proof of insurance to your seller through your insurance carrier’s proprietary app.

If you recently purchased insurance or plan to purchase a policy in tandem with your new car, you can ask your provider for temporary proof of coverage. Most providers enable easy access for customers to request proof of insurance by mail, email, download, or from their site or app. 

Is There a Way to Save on Auto Insurance?

Generally, insurance providers offer incentives for customers who avoid traffic violations and accidents. Carriers provide competitive deals for new customers with good driving records, such as low monthly premiums. Others give exclusive discounts to long-time customers with consecutive years of no accidents. 

Drivers may also qualify for discounts on car insurance for being responsible in other areas. Many providers favor customers with good credit. Drivers can often earn discounts by participating in a “safe driver” program or taking a defensive driving course. Some providers offer savings for bundling an auto policy with homeowners or renters insurance.

Since liability is the most basic form of coverage required in almost all 50 states, this coverage is the most affordable and tends to offer low monthly premiums. Leveling up to collision or comprehensive insurance costs more but may offer discounts. Some insurance companies offer additional discounts for enrolling in auto payments.