When you buy a new car, transferring insurance from your old vehicle to your new vehicle can be confusing, but it doesn’t have to be. You can cancel the existing policy and start a new one or transfer the policy to the new car. You’ll need to consider the policy terms, price and deductible to decide which option suits your situation. Read on for a detailed guide on how to transfer insurance to a new car.
Can I Transfer My Insurance to Another Car?
Yes, you can transfer insurance from one car to another. An insurance agent can facilitate this process, or you may be able to make the transfer online. The most common reason to transfer insurance from one car to another is when you buy a new car and sell the old one. If you plan to keep the old car, you must get a new insurance policy to cover the new vehicle.
What You Need to Do When Transferring Auto Insurance to a New Car Purchase
Following a step-by-step guide to transfer auto insurance to a new car purchase can simplify the process This guide will walk you through how to transfer car insurance to another car. This includes evaluating the current policy and coverage, contacting your insurance company and checking whether you can transfer the policy to a new vehicle.
Evaluate Current Policy and Coverage
The first stage in transferred auto insurance is understanding your current policy and coverage to determine whether it will adequately cover the new vehicle. As part of this process, it’s important to double-check whether your existing insurance policy meets mandatory auto insurance requirements for your state. At a minimum, you will need to have coverage for injuries and liability to drive your car in many states.
Not having sufficient insurance can put you at financial risk in an accident. Look at your total deductible and maximum coverage amount compared to the new vehicle’s value. Here are the additional steps to consider.
Understand Your Current Policy and Coverage
Check your current policy’s validity, deductible, total coverage and policy type. Compare this with your desired insurance coverage and new vehicle value.
Contact Your Current Auto Insurance Company
If you decide to transfer your auto insurance policy, you must contact the auto insurance company or request the transfer online. During this process, the insurance company may update the insurance premium to reflect the new vehicle's value or additional coverage if you update the policy.
Find Out Whether You Can Transfer the Policy to a New Vehicle
Some insurance policies do not allow transfer to a different vehicle. In some cases the new insurance premium or coverage value might not be the best available offer. At this stage, you have the option to compare quotes from other insurance companies to choose the best option for your vehicle.
Compare Quotes from Other Insurance Companies
Before transferring insurance to a new car, comparing current auto insurance quotes can help you secure more favorable terms or a lower insurance premium. Here are the steps:
Request Quotes from Different Insurers
Start by requesting quotes from different insurers. You can easily compare online lenders to find current average rates. To start, you can find the best car insurance or the best cheap auto insurance here.
Analyzing the Pros and Cons of Each Option
Carefully analyze the pros and cons of each offer, including insurance premiums, coverage value, type of insurance and deductible to balance costs with coverage.
Determine the Ideal Coverage for Your Needs and Budget
You will need to decide which type of coverage is best for your vehicle, location and budget. The five most common car insurance coverage are:
- Auto liability coverage
- Comprehensive coverage
- Collision coverage
- Personal injury protection
- Uninsured and underinsured motorist coverage
If you want to cover personal injury, liability and collision damage, consider comprehensive coverage.
Make Necessary Adjustments to Your Policy with Old Insurer
Next, it's time to adjust the policy with your insurer. This can include making changes or canceling the existing policy.
Review Any Cancellation Fees or Penalties for Changing Policies Early
Before making any changes, ask the insurer about cancellation fees or early termination penalties. They may also charge a fee for changing policies. Be sure to calculate the total costs and factor those into your decision to transfer the car insurance to a new vehicle and decide whether you will cancel, transfer or change the policy.
Request Cancellation or Change in Existing Policy if Necessary
If you plan to cancel the policy, you will need to request the cancellation and double-check any fees or penalties for canceling the existing policy. You may be able to cancel online or over the phone with the insurance company.
If you choose to change or transfer the existing policy to the new vehicle, this can be done over the phone or sometimes online. When you request the changes, be sure to double-check new premiums and coverage terms.
Sign Up With a New Insurer And Transfer Insurance to a New Car
If you decide to cancel the policy, it’s important not to leave the vehicle uninsured. Set up the new auto insurance to take effect on the same day or one day before the old policy is canceled. Setting up new auto insurance is relatively simple. Here are the steps.
Complete Necessary Documentation From the New Insurer
First, you will need to apply for auto insurance with the new issuer. This requires filling out an application, which you may be able to complete online.
Finalize the Transfer
After you get the new policy terms and understand the monthly premiums, you can finalize the auto insurance transfer. Set the new policy to begin before the old policy is canceled to ensure complete coverage.
The Cost of Transferring Insurance From One Car to Another
The cost of transferring auto insurance from one car to another depends on the insurer’s policy. There may be a transfer fee of $25, but some insurers won’t charge a fee. Transferring auto insurance can incur additional costs, especially if upgrading or changing coverage.
Types of coverage you might choose include:
- Comprehensive coverage
- Collision coverage
- Auto liability coverage
- Personal injury protection
- Uninsured and underinsured motorist coverage
If you switch from one plan to another, premiums may go up. For example, if you decide to upgrade from only holding auto liability coverage to comprehensive coverage, your premium will most likely increase. Newer, higher-value vehicles will generally require higher insurance premiums for comparable coverage.
How Much Time Do You Have to Transfer the Insurance to the New Car?
Where you live and which car insurance company you use can affect the coverage and transfer requirements. You usually have between seven and 30 days to add a new car to your insurance policy or transfer the policy to the new vehicle.
If you’re buying a new car, most car dealerships will expect you to have auto insurance coverage before driving the vehicle off the lot. You’ll want to transfer the auto insurance or add a new policy to start on the purchase date.
What Will Happen if I Don’t Transfer My Auto Insurance to My New Car?
The possible consequences if one fails to transfer the insurance include fees and liability in case of an accident. If you don’t have insurance coverage, you will be personally liable for all damages and, in many cases, damages to the other driver or vehicle involved in an accident.
Most states also have minimum insurance requirements, and failing to meet these can result in penalties or fees. Policies vary by state. In New York, for example, if you fail to maintain liability insurance coverage for your vehicle at all times, you could face suspension of your vehicle registration and driver’s license as well as substantial monetary penalties. Find a comprehensive list of state liability laws.
Final Tips on Transferring Auto Insurance
Whether you transfer auto insurance to a new vehicle, take out a new policy or change insurers, ensuring adequate insurance coverage is essential to protect yourself from fines, license suspension and liability in case the worst happens. Take time to research insurance policies ahead of time to find the most favorable terms to offer the coverage you need. Ready to get started? Find a guide to picking the right car insurance, how to get cheaper auto insurance and then find the best car insurance for new drivers.
Frequently Asked Questions
Do I need to cancel my car insurance when switching?
If you switch to a new insurance policy or provider and don’t plan to drive the old vehicle — you must cancel the old insurance policy. How you switch your insurance to a new car or cancel a policy varies by insurer, but you can usually do it by phone and, in some cases, online.
Does insurance follow the car or the driver?
Insurance follows the car, but you can proactively switch insurance to a new vehicle.
Does transferring auto insurance to a different vehicle affect my premium?
Transferring auto insurance to a different vehicle may affect your premium, deductible or other insurance policy terms. Be sure to double-check premiums, fees, deductibles and coverage before finalizing the auto insurance transfer.
Is it possible to transfer my current auto insurance policy to any vehicle that I buy?
You will have to check with your insurer, but in many cases, it is possible to transfer your auto insurance policy to a new vehicle. The insurance premium may change based on the new vehicle’s value and condition.
Is it possible to transfer insurance from a leased car to a new car purchase?
You will have to check with your insurer to find out about your policy. In general, vehicle insurance is bundled with the lease terms, so you can’t transfer it to a car you will purchase. Instead, you’ll need to research insurance policies and purchase a new auto insurance policy for the new vehicle.
About Alison Plaut
Alison Plaut is a personal finance, business, and insurance writer with a sustainable MBA, passionate about helping people understand insurance choices and financial options to create financial freedom. She has more than 17 years of writing experience, focused on insurance, real estate, business, personal finance, and investing. Her work has been published in The Motley Fool, MoneyLion, and she is a regular contributor for Benzinga.