Many people will complete a new car purchase on a weekend or evening, and when they call their agent to notify them, the office is not open. So, they wonder if they have insurance and if it is OK to drive the car.
In most cases, they do have coverage. If you have an auto insurance policy that is in force, you will generally have coverage for a newly purchased auto for a limited time. Typically, you will have the same coverage as you have on the current car or the car that you traded in for 14 days, but this can vary depending on your insurance company and the policy they provide. So, if you have comprehensive and collision coverage on at least one car on your policy, you will have that coverage on the newly purchased car also.
If you have only liability coverage on your current auto policy, you will generally be provided this coverage for a newly purchased car, and the coverage may include comprehensive & collision, but usually only for 4 days. Again this depends on your individual auto insurance policy.
Because of this, it is good advice to contact your insurance agent or company as soon as possible after the purchase of a new car, so you can provide the information on the new vehicle and request that coverage is added to your insurance policy for this car. You may even want to check before completing the purchase to find out what coverage you will have, and the information you will need to provide to complete the update to your auto policy.
This automatic coverage only applies to the named insured on the auto policy. Typically that would only be the person listed in the mailing address on the policy, and their spouse if they are married. You may have children listed as drivers on the policy, but they generally would not have this automatic coverage if they purchase a car themselves and title it in their name.
Also, the newly purchased vehicle must be eligible to be added to the personal auto policy. Generally this would be most private passenger cars, sport utility vehicles or pickup trucks. So, if you purchase a commercial vehicle, large truck or motorcycle, it most likely will not be covered on your personal auto policy. You would need to verify this with your agent or insurance company.
If you do not currently have an auto insurance policy, you will need to arrange to purchase auto insurance for your new car before you complete the sale. Then, once you have the auto policy in place, you can complete the purchase of the car and drive away knowing you are covered.
Since automobile insurance is required by law in Minnesota, a car dealer will generally require that you provide proof of insurance when you purchase a car. Typically they will just ask to see the insurance ID card for the car you currently own.
If you will be getting a loan on the car, the bank will require that they are mailed proof of insurance, so you will need to provide this mailing address to your insurance company so this proof can be mailed. Same thing if you are leasing the car.
And, if you do have a loan or a lease, you may want to consider adding gap insurance to your auto policy. This option will provide coverage for the difference between the current value of the car and the outstanding balance on your loan or lease.
Please contact us if you have any questions regarding your auto insurance, we are happy to help!