How many days after purchase do you have to get auto insurance?

Getting auto insurance is extremely important for your financial health, as well as a legal requirement in most states. How many days do you have to get insurance for your new car? Should you buy it before getting the new car or afterward? If you have another car, do you simply add the new car to your existing policy or will it be automatically covered? Read on to learn more. 

How many days do you have to insure a new car?

Depending on the state you reside in and your insurance company’s rules, you will have a grace period of seven to 30 days to inform your insurance provider of your new car purchase. It acts the same way as a grace period for car insurance payments, meaning there are factors that will decide the amount of time and if it’s even a possibility. 

If you are purchasing a new car from a dealership, you will need proof of insurance to drive the car out of their lot. You will not get possession of your car if you do not have insurance. 

If you are buying your first car, you can purchase a policy from the dealership. If you already have insurance on another car, you can simply show your insurance card and drive the car home. From there — and depending upon where you live — you will have between seven to 30 days to add your new car to your existing policy. 

If you fail to notify your insurer in the given window, your car will not have coverage. 

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Will a new car be covered by the current policy? 

Your new car will be covered by your existing policy for a maximum of 30 days. The exact duration will depend on the state you live in and the insurance company. However, it is important to note that this is not free coverage. 

If you don’t report the purchase to your insurance company, you will not have been covered that whole time, and any claim that happens during that time can be denied. Coverage will be backdated and you will be charged from the date you bought the car, so waiting gains you nothing. 

You will have a window of seven to 30 days to insure your new car on its own policy.

Trading Your Car

When you trade your old car for a new one, your new car will have the exact same amount of coverage as the existing policy. 

If you trade in a car, you can simply replace the old one with the new one on your policy. However, if you fail to report the replacement vehicle, the insurance company will not necessarily cover any claims. Failing to provide this updated information can be considered fraud, as you were potentially not paying the correct rate for that new car’s coverage. 

Understanding Your Auto Insurance Options When Buying a Car

When you purchase a new or used vehicle, one of the first considerations should be how and when to insure it. This section offers a detailed look at the insurance requirements and grace periods, ensuring you’re fully covered from the moment you take ownership.

Immediate Insurance Requirements for New and Used Cars

Insurance Before Driving Off the Lot:

• At a Dealership: Dealerships require proof of insurance before you can drive your new or used car off the lot. This policy needs to meet or exceed the minimum liability coverage required by your state.
• Private Seller Purchases: While a private seller may not demand to see proof of insurance, it’s legally required to have at least minimum liability coverage before driving the vehicle on public roads.

Setting Up Insurance Before Purchase:

• It’s advisable to arrange your insurance at least a day before picking up the vehicle. Contact insurance providers with the vehicle identification number (VIN) of the car you intend to buy, compare quotes, and set up a policy to activate on the day of purchase.

State-Specific Grace Periods for Adding a New Vehicle to an Existing Policy

While many insurance policies provide a grace period for adding a new vehicle to an existing policy, this period can vary significantly:

• General Grace Periods: Most insurers offer a grace period that ranges from 7 to 30 days, allowing you to notify your insurer about the new purchase and update your policy accordingly. This grace period is critical because it ensures continuity of coverage under the terms of your existing policy.
• State Variations:
  • Illinois and Georgia: Require that new vehicles be added within 7 to 30 days to retain full coverage under the terms of your existing policy.
  • Florida and California: These states typically require that any new vehicle be reported to your insurance within 14 days to ensure that the coverage extends to the new vehicle.

Important Note: Always verify the specific requirements and grace period with your current insurance provider, as failing to comply can lead to a lapse in coverage.

How to Efficiently Add a New Car to Your Insurance Policy

Steps to Insure Your New Vehicle:

1. Inform Your Insurer: As soon as you’ve agreed to purchase a new or used car, contact your insurance company with the make, model, and VIN of the vehicle.
2. Review Coverage Options: Decide if your current coverage levels are appropriate for the new vehicle or if adjustments are needed. This might include increasing liability limits or adding comprehensive and collision coverage.
3. Update Your Policy: Officially add the vehicle to your policy by the end of the grace period to ensure seamless coverage. Provide any additional information your insurer may require and confirm the start date of the coverage.

Consequences of Not Securing Insurance Within the Grace Period

Risks of Delaying Insurance Activation:

• Lapse in Coverage: If you do not add the new vehicle to your policy within the grace period, you risk having no insurance coverage, which is illegal and exposes you to significant financial risk if an accident occurs.
• Backdating Premiums: Should you report the vehicle after the grace period but still within a reasonable time, the insurer may backdate the coverage but also charge you for the premium retroactively to the date of purchase.

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How to Get Auto Insurance Quickly

If you don’t have insurance, you must buy it before you can drive the new car. Research is a must here. If you buy insurance at the dealership, you may end up paying more for it. To get the best price on auto insurance, decide on a car make and model and then compare quotes from multiple insurers. Finding cheap auto insurance quotes can easily be done online nowadays. You can then decide on a company that is offering the best price. 

These are the documents you will need: 

• Drivers’ names and birthdays
• Address for the drivers (only drivers living at the same address can be on the same policy) 
• Drivers’ license and Social Security numbers

If you have done your research and keep these documents ready, you can get the car insurance policy on the same day. 

We’ve compiled a list in the table below of each state’s minimum liability coverage requirements, in partnership with the Insurance Information Institute.

Minimum Auto Insurance Requirements by State

For reference:

• BI – Bodily injury
• PD Liab – Property damage liability
• UM/UIM – Uninsured motorist and underinsured motorist
• Medpay – Medical payments

Final Thoughts on the Timeline for Getting Car Insurance

If this is your first car, the dealership will not let you drive it off their lot without an insurance policy. Therefore, your best bet is to compare insurance quotes before you buy the car in order to get the best price. 

If you already have a car with auto insurance, you can show your insurance card when you buy the new one. You will then have a seven-to-30-day window to inform your insurer of your purchase, and they will cover your new car during this period. If you fail to inform them, you will lose coverage and the lack of coverage will be backdated. 

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