You’ve been thinking about upgrading to a new vehicle with the latest high-tech features, and now the dealerships are inundating you with promotions for their holiday weekend car sales. You visit your local dealer, find the perfect choice, and decide to make a purchase. But before you can take possession of the vehicle, the dealer needs to see proof of insurance.
When you buy a car on the weekend or a holiday, it can be a little more complicated to meet the auto insurance requirements on the spot. The following tips can help you drive that shiny new vehicle off the lot whenever you’re ready.
Fact: Proof of Insurance is Almost Always Required
Though the requirements might vary by state or dealership, most car dealers ask for proof of automobile insurance before they allow you to take possession of the vehicle. That’s not just to reduce their risk; it protects you as well. If you have the unfortunate experience of getting involved in a collision the same day you buy the car, you want to be sure you’re covered.
The good news is that there are easy ways to ensure you are protected even if you buy a car when your independent broker or the insurance company is closed for the weekend or a holiday. These tips will take the stress out of the process.
Tip #1: Contact Your Insurance Advisor in Advance
Let’s face it: Sometimes you go car shopping on impulse. But if you plan to visit car dealers soon and think you might make a purchase, call your independent broker ahead of time. They’ll let you know your options for securing car insurance, even if you decide to sign the contract on a Saturday. Typically, those options depend on whether you already have coverage on another vehicle or are buying your first car.
Tip #2: Check the Lead Time
It doesn’t take long for your independent insurance advisor to provide proof of insurance on a newly purchased vehicle, but it’s worth checking the typical lead time. At B. F. Saul Insurance, we can usually secure proof of insurance on the same business day, assuming we already handle your car insurance. For new auto insurance clients, it is best to allow up to a week since some states (like Massachusetts) have stringent requirements that can slow the process.
Tip #3: Ask About the Grace Period
Did you know that many car insurance policies provide anywhere from 15 to 30 days of automatic coverage for a newly acquired vehicle? Whether you add an additional vehicle to your existing policy, or swap one vehicle for another, as long as you have an active policy with a grace period then the insurer will automatically cover the newly purchased vehicle for the specified timeframe. If your dealer requires proof of insurance, and your policy contract includes a grace period, that should suffice. However, be sure to contact your independent broker before the grace period ends so they can add the vehicle and avoid a coverage gap.
Tip #4: Know Your Loan or Lease Requirements
When you finance a vehicle, the finance contract will detail any insurance requirements you’re expected to meet. For example, some lenders and leasing companies require you to carry loan gap coverage. If your vehicle is stolen or totaled, this feature ensures the finance company is made whole by covering the gap between the amount you still owe and the amount the insurer agrees to pay on the claim. Most finance contracts also specify a minimum deductible amount. If you don’t currently have an auto loan or lease, it’s possible your existing policy won’t meet the new finance contract’s insurance requirements. Be sure to update the policy accordingly and provide the dealer with the name and address of the lender or leasing company.
Tip #5: Use the Insurer’s Online Portal or App if Necessary
If a dealer requires proof of insurance on a weekend or holiday, and you have not secured it in advance, you can likely obtain what you need through the insurance company’s online portal or smartphone app. Many insurers enable you to download an insurance card or a copy of the policy contract through these digital tools.
Tip #6: Talk with Your Broker About Your Coverage Needs
Whether you add a vehicle to your policy using the insurer’s self-service tools or you use the grace period on an existing policy in the short term, contact your independent broker as soon as possible to ensure you have the right coverage on the new vehicle.
For instance, you might want to add agreed value coverage for your newly purchased vehicle, especially if it’s a high-value car like a Tesla Model X Plaid or Porsche 911. Unlike actual cash value coverage, agreed value coverage doesn’t subtract the car’s depreciation when determining how much the insurance company will pay out if your vehicle is totaled within the first year. Given how quickly and significantly a car depreciates in value, having this coverage on a high-value car can make a world of difference.
The personal insurance specialists at B. F. Saul are here to help whenever you purchase a vehicle. Contact us to learn how we can help protect what you value!
