If you’re planning to purchase a new car, be sure to obtain insurance well in advance. Even if your policy does provide automatic coverage, it may not be sufficient to cover the cost of repairs for a more expensive vehicle. Following are some tips to help you get the right insurance when making a purchase.
Call for Quotes in Advance: Obtaining a quote in advance for the make, model and age of the vehicle will provide a full picture of the total cost of ownership for a new car, and it’s often possible to have a policy put into effect before driving the vehicle off the lot. Although most underwriters extend coverage to new cars purchased, it’s better to be safe than sorry. Verify that automatic coverage is in effect as well as the number of days required for notification.
Adding or Replacing: Tell your agent whether you will be adding to or replacing the current policy in order to obtain the best rates and coverage options. If you are replacing the current policy, most underwriters allow 14 to 30 days for notification. Premium adjustments are frequently required and may leave you underinsured if the new vehicle is involved in an accident.
Fill That Gap: Buying a car or truck is typically the second largest expenditure most people make, so it isn’t surprising that car loans or financing is necessary. Unfortunately, it’s sometimes possible to owe more than a car is worth after driving it off the lot. To avoid large gaps in coverage, most underwriters offer “gap insurance” designed to pay off large loans in the event of a major loss.