If you are in
the process of buying a new car, you are probably thinking about lots of little
details like whether you want a cloth or leather interior or if you want to
upgrade to the all-wheel-drive model. With all the excitement of a new car
purchase, you may be overlooking one essential thing – new car insurance.
Did you know that a new make and model on your insurance policy can significantly change your premiums? Did you also know that you may be required to add specific coverages to your plan that you did not have in the past? Before you drive off the lot in your new vehicle, consider these five car insurance tips.
1. Be aware of your insurance company’s policies
If you already have a policy, you may not think you need to buy car insurance specifically dedicated to your new vehicle. This may be partially true, but you should know that not every company has a grace period to add a new car, and if they do, the period can differ from company to company.
2. Understand your existing coverage
Everyone’s auto insurance coverages are different, but your current policy will certainly include coverages that are required. Coverage requirements vary from state to state, but some examples include:
Liability insurance. This is the coverage that would help to pay for bodily injuries or property damage that you inflict on another party.
Personal injury protection coverage or PIP, which is required in 12 states. PIP coverage will help to pay for medical expenses regardless of who was at fault.
3. Determine if you need additional car insurance.
Uninsured/underinsured motorist coverage. This insurance would help to pay for your injuries or vehicle damages if you were involved in an accident with a driver who was uninsured or underinsured.
For new car purchases, you may be required to add other coverages such as:
Collision coverage, which will help pay for damages to your vehicle that result from an accident regardless of who is at fault.
Comprehensive coverage, which helps pay for damages to your vehicle that result from something other than collision, like a tree branch that falls on your car or if someone steals it.
If you have a lease or loan on your new
car, you will be required to add these coverages. If you bought your car
outright, you still should consider adding these coverages to protect your
4. Consider more coverage beyond what is required
Since you invested time and money to buy a car, you will want to ensure you are protected if the unthinkable happened. Certain coverages aren’t required but are worthy of consideration, such as:
New car replacement coverage. While collision and comprehensive coverage help to repair or replace your vehicle, unfortunately, they factor in depreciation. This means that, as soon as you drive your car off the lot, its value begins to decrease.
For example, if you bought a new car for $26,000 and totaled it in six months, your insurance may only pay out $20,000. Replacement coverage for a new car would cover the amount it costs to replace your vehicle with a brand new one.
Gap insurance. Gap coverage will help to protect you if your car is totaled, and you wind up owing more on it then its depreciated value. Take the example of the $26,000 vehicle. If you totaled your car and its depreciated value was calculated at $20,000, then your comprehensive or collision coverage would pay out that amount. However, if you still owed $22,000 to your lienholder, then you would be required to pay the remaining $2,000 out of pocket without gap insurance.
5. Get a quote in advance
Now that you have an understanding of these insurance tips and the specific coverage options you want, you can begin to get quotes from companies before you purchase your new car. All you will need to obtain a quote is the new vehicle’s vehicle identification number, which is often available on a dealership’s website.
You may be eager to pick-up your new vehicle as soon as possible and hit the road, but you should be sure you are protected if something were to happen to your new ride. Follow these auto insurance tips, and you will have all of the coverage you need to protect your new car.
Looking to buy insurance for your new car? Look no further than Freeway Insurance. Freeway compares rates from top insurance companies to find you the best coverage at the best price. Get a free car insurance quote online or over the phone today.