Car Insurance and New Vehicles: Change or Cancel?

Purchasing a new car, truck, or van requires patience and research. You will want to take safety, features, and insurance into consideration. Most people look at a new insurance policy when they are considering purchasing a vehicle. So, what do you do if you already have an insurance policy?

Luckily, most auto insurance providers allow you to amend your policy. You can add a new car, remove a car you sold (or traded in), and even add or remove drivers. With some insurance companies, you will have to pay a fee to add or remove a vehicle. You will also see an increase in your premiums.

When to Change

Your new vehicle must be on your car insurance policy within 30 days of purchase for most states. You will want to talk to your insurance provider and look at the local laws to see if it is different for you. If you fail to notify the company, your vehicle will not have insurance and you could be facing large fines if pulled over. If you wait to cover your vehicle, the insurance provider can decide to limit the amount of coverage they will allow on the policy for a set period.

How to Change

When you are looking to purchase a new vehicle, call your insurance provider to let them know. You will want to ask what changes will need to be made, and how much it will cost to have your policy amended. You want to make sure that amount is placed in the policy’s terms and conditions so you can have a copy of it. It is standard for companies to re-issue a terms and conditions policy document when you make changes to your plan.

Change or Cancel

Before you immediately make the jump to changing your policy, consider your other options. You will want to shop around again and look for the best price. If your car is your second vehicle, you will want a policy that offers multi-car discounts. When you are trading a car in, you will want to look for better deals that are available. Many companies are becoming more convenient with mobile apps and web pages to file claims.

Another factor to take into consideration is the amendment fee. It is usually less than a cancellation fee. However, it may give you the ability to find a company that does not charge for you to make changes to your policy. You may also find a company that you like and offers an incentive to make the switch. It is also possible not to have a cancellation fee because your policy is up for renewal.

Whether you choose to cancel or change, make sure there is no lapse between policies. The lapse will open the doors to the ability to raise rates for failure to have continual insurance. You want to make sure you keep the new and old policy on hand few a few weeks until you are certain the plan has completely switched to your new vehicle.

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