A Guide on Car Insurance Transfers

John avatar JOHN C. BALDWIN | JAN 21, 2021

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According to the Insurance Information Institute's most recent study, about 13% of drivers do not have car insurance. If you've purchased a new car recently, you might not realize it, but you could be an uninsured driver too.

When you buy a vehicle, it doesn't automatically get added to your insurance plan. Your old one doesn't get taken off instantly, either. You have to ask for a car insurance transfer.

To learn about how and why you should conduct an insurance transfer shortly after you get a new vehicle, keep reading.

Why Car Insurance Is Essential

In 48 out of the 50 states, it is illegal to drive without car insurance. Virginia and New Hampshire are the only two states who offer alternative conditions. In Virginia, you must pay an annual $500 fee, and New Hampshire increases your liability fees.

While it may seem like a great way to cut down on your spending, not having car insurance could likely cost you in the long-run. There is a different fine in every state for people caught driving without insurance.

For instance, if you cannot show proof of insurance in California, you have to pay a $100-$200 fine. If you get caught without it again, that number increases to at least $200, and the state can impound your vehicle.

Purchasing comprehensive coverage means the insurance company will help you with damages to your car that are out of your control—like burglaries, storms, and fires. If you want your car repaired if you cause an accident, you must get collision coverage.

Remember that when your car is repaired, you'll need to pay your deductible first, which you'll choose when you purchase your insurance. The insurer will then pay for the rest up to the value of the car.

Liability is paid up to the limit you choose, with a minimum based on state laws. If you don't have insurance and you cause an accident, you risk getting sued by the person you hit, and you'll need to pay for their repairs and injuries out of your own pocket.

Twenty-one states permit personal injury protection, which includes medical expenses for injured passengers. For those with families, this option might give you peace of mind.

When you have auto insurance, you never have to worry about getting into legal trouble. Furthermore, you can stress less about the financial risk that comes with driving without it.

Why an Insurance Transfer Is Important

When you sell your car, you'll want to take it off your insurance as soon as possible. After the transfer of ownership, if the new owner gets into a car crash and the vehicle is remains listed on your insurance, you'll be responsible for repairs.

Getting a new car from a dealership grants you the opportunity to transfer your insurance before you even leave the lot. However, when you purchase a vehicle online or from an individual seller, you'll need to do it on your own time.

How to Transfer Car Insurance

Golden BMW in the parking lot

There are four pieces of information you are going to need when you conduct your car insurance transfer. That information includes the registration and title, the year, make and model, the vehicle identification number (VIN), and the odometer reading.

While you transfer the insurance, you could also upgrade if need be. Sometimes people upgrade their plan because they previously bought cheap car insurance, and now they want extra liability coverage. Ask your company about changing your plan, and then get a quote to see how much it would cost.

Amount of Time You Have To Make the Insurance Transfer

A grace period is the amount of time you have to transfer your insurance over to your new car, and it varies depending on your insurer. Typically the grace period lasts anywhere from a week to a month. Look up their policies beforehand to see how long you have to update your insurance.

If you happen to get into an accident during the grace period, the coverage on your policy will apply. If you didn't have comprehensive and collision coverage listed, you won't be able to get your car repaired using your insurance.

Do Your Research

Doing your research before purchasing a car is always advised because you want to negotiate the best deals possible. Additionally, you want to know every detail about the automobile's history before purchasing it.

Unfortunately, some sellers will lie about driving history to persuade you to purchase the car. To keep this from happening to you, use a National Motor Vehicle Title Information System data provider. Here at EpicVIN, we will run background checks on the car you want to purchase to ensure that you have accurate information regarding its history.

Insurance Prices

After you've narrowed down your options, contact an insurance agent to get an idea of how a new car will affect your plan's cost. There are a few factors they will consider when they come up with a car insurance quote. The first one being the car's make and model.

Luxury cars, sports cars, and electric cars are all going to drive your auto insurance rate up. Because they are expensive, it will cost the insurance company more to repair them.

An insurer will also consider how well the vehicle does in its safety inspection. If they know that the car can withstand impact and does an excellent job of keeping its passengers safe, then it's more likely that they'll offer you a lower rate than if it did not test well.

Some databases keep track of how often people burglarize certain cars. The higher the car ranks, the higher your insurance rate will be. Research which cars are more susceptible to burglary before starting your car search to avoid paying more for your insurance.

Other crucial factors include credit score, age, and zip code. Once you know what affects an insurance rate, ask for auto insurance quotes from different companies and make a car insurance comparison chart to see where you'll get the best deal.

Perfect Your Car Buying Skills

Now that you understand how crucial it is to complete an insurance transfer when you purchase a new car, you'll be ready to take your new vehicle out on the road in no time.

If you haven't bought one yet and are leaning towards a used vehicle, reach out to us with any questions you might have regarding our services. Our VIN decoder will help you find a reliable car, one you'll be able to drive for years to come.

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