Car insurance is a necessity when purchasing a new automobile. However, you may be wondering, “Do I need car insurance before I buy a car?” This is a common question asked and an important one as well. Knowing the answer can help you determine when to purchase auto insurance and help you discover how long the process takes until you’re insured.
Do I Need Car Insurance Before I Buy a Car?
In every state except New Hampshire, drivers are required to have car insurance before purchasing a vehicle. In fact, it’s illegal to drive a car without insurance, even if you just purchased it. Minimum liability car insurance is a requirement in most states before buying a car. Most dealerships won’t let you leave the premises with your new vehicle unless you are fully insured and have proof of that insurance.
If you’re unsure of the insurance requirements for your state, you can look up your state’s DMV website to learn what the minimum requirements are. This website should give you detailed information about the type of insurance you need before legally purchasing a vehicle. If you’re unable to find the information online, you can always call your state DMV and inquire.
Insurance is required before purchasing a vehicle for a variety of reasons. One of the most important reasons is if you happen to be involved in an auto accident without insurance. For example, if you drove your new car home without insurance and got into an accident, you would be liable for paying for injuries and damages out-of-pocket, which can be extremely costly.
How Can I Get Car Insurance Before Purchasing a Vehicle?
Most, if not all, car insurance companies will allow you to purchase coverage before you buy a new vehicle. You can spend some time comparing rates and shopping for insurance ahead of time to give yourself a chance to see what’s available and what you can afford. You can also take this time to determine the type of insurance and coverage you need and to find a plan that includes it all.
What’s the Time Period for Getting Auto Insurance?
How long it takes to obtain car insurance can vary, but many insurance companies offer coverage for as little as one day. For example, if you’ve already found a plan you want to purchase, you can contact the insurance company and provide them with all the necessary information. They can then offer you coverage that begins from that day forward. You may also be able to choose to wait until you have found a vehicle to start your coverage. Speak with the insurance company to determine their requirements and coverage timeline.
What Type of Coverage Do I Need?
There are six different types of insurance coverage options. These include liability coverage, uninsured and underinsured motorist coverage, comprehensive coverage, collision coverage, medical payments coverage, and personal injury protection. The specific type of coverage required will largely depend on your state’s specifications as well as your own personal needs and wants. The following is an explanation of the different types of coverage available:
Liability Coverage
This type of coverage is typically mandatory, and you may be required to purchase a minimum amount of liability coverage depending on your state’s laws. Liability coverage includes coverage for bodily injury liability and property damage liability. Both liability coverages are put in place to protect you should you be involved in an accident where injuries and damages occur.
Uninsured and Underinsured Motorist Coverage
This type of coverage covers you in the event that you’re involved in an accident with a motorist who doesn’t have insurance or who is underinsured. Uninsured and underinsured motorist coverage can help pay for any injuries or damages you incurred that the other motorist’s insurance won’t or can’t cover. Some states require this, while this type of coverage is optional in other states.
Comprehensive Coverage
Comprehensive coverage goes beyond car accidents and provides reimbursement in the event of car damage due to fire, vandalism, theft, or inclement weather. Each comprehensive coverage plan is different and will cover different perils. This type of coverage comes with a deductible, so you’ll need to pay a certain amount before your insurance will reimburse you for damages.
Collision Coverage
Collision coverage is just as it sounds – liability insurance that provides coverage in the event of a collision. This can include a collision with another vehicle or an object like a tree or fence. In most states, collision coverage is optional. However, if you’re leasing a vehicle or working with a lender, you may be required to hold this form of coverage.
Medical Payments Coverage
Medical payments coverage offers assistance when you or others in your vehicle incur injuries due to an accident. Examples of covered costs include emergency room visits and surgery. This type of coverage is mandatory in some states and optional in others, but nearly all states offer this type of auto coverage.
Personal Injury Protection
Also known as PIP, personal injury protection is only offered in a few states. This type of coverage can help offset the cost of medical expenses incurred after an automobile crash. It may also cover other expenses that come as a result of injuries, such as lost income.
How Can I Save on Car Insurance?
You can save on car insurance by taking the time to shop around. There are several available discounts on car insurance, so it’s important to do your research and reach out to a few different insurance companies to learn more about their plans and what discounts they offer. Examples of ways to save include bundling, being a safe driver, and telematics.
Having car insurance before buying a new vehicle isn’t just smart, it’s required. To learn more about the car insurance requirements in your state, contact your state’s DMV department.
At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.
