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How To Check Insurance Before Buying A Car

Buying a new vehicle can be an exciting experience; looking at various makes and models and trying to find the ride that suits you and your personality (and budget) perfectly can be a lot of fun. But even as you’re test-driving cars and trying to decide which one to purchase, you should consider how you will obtain auto insurance to comply with provincial law and protect your financial investment. In this article, we’ll take a look at how to check insurance before buying a car.

 

How to check insurance before buying a car: Frequently Asked Questions

 

Do I need auto insurance before buying a car?

From the moment you drive your new vehicle off the lot, you require car insurance by law. This is why learning how to check insurance before buying a car is crucial. In Ontario and Alberta, you’ll need to buy an auto insurance policy that provides several mandatory insurance coverages which may impact the total cost of your car insurance. These include:

Accident benefits coverage – This insurance coverage protects you and any occupants of the car if you’re injured or killed in an accident, regardless of fault.

Accident benefits coverage pays for any healthcare costs not covered by your provincial health insurance plan, including rehab and physio costs, attendant therapy, and the expense of home maintenance if the injured person isn’t able to clean and maintain their home due to the injury. There is also limited loss of income coverage that will pay a portion of the injured person’s salary if they’re unable to work.

Direct compensation – property damage coverage – This coverage will pay the cost to repair or replace your vehicle and its contents if you’re involved in an accident that was caused by someone else. Even though the accident was caused by someone else, your claim will be paid by your insurer. Note that there are some conditions that apply to this coverage.

Uninsured automobile coverage – This coverage steps in if you or your family are injured or killed by a hit and run driver or a driver who doesn’t have insurance on their vehicle. It will also pay to repair or replace your vehicle if it is damaged by an identified uninsured driver (but doesn’t cover hit-and runs).

Third-party liability – This part of your policy covers damages to other people in an auto accident for which you are responsible. There are two types of coverage included in third party liability.

Bodily Injury – This coverage applies when the driver of your vehicle is responsible for killing or injuring a pedestrian or someone in another vehicle. Third-party liability coverage pays your legal fees as well as any claim paid to the victim.

Property Damage – This component pays for any property that is damaged during the accident, such as fences, trees, bicycles, and utility poles. Third-party liability coverage never pays to repair or replace your own vehicle if you’re responsible for the accident.

Before taking possession of any new vehicle, whether you purchase a new car or buy a used one, you need to ensure that you purchase an insurance policy that includes all the coverages above with at least the minimum limits required by your provincial laws.

How soon after buying a car do I need insurance?

The short answer is that you should ensure that you have a valid auto insurance policy and a pink liability slip before you drive the vehicle off the lot. It is illegal to drive a car without insurance. If you’re purchasing a new or used vehicle at a dealership, especially if you are buying the car with a bank loan or lease, your lender will require proof of insurance before taking ownership of the vehicle.

If you are buying the vehicle privately, you should ensure that you contact your insurance provider before driving the vehicle home.

Your insurance professional will ask you a series of questions about the vehicle, such as who will drive it as well as how you plan on using the new car- all of which may impact your insurance premiums. They will then provide you with a quote to insure the new vehicle and ask whether you‘ll be removing any previous vehicle from your policy. Once you arrange for payment of the new policy, they’ll email you a new “pink” liability slip, proving that you have proper insurance coverage on the vehicle.

If it’s not possible for you to contact your insurance provider before you drive your new car, your auto insurance policy likely provides you with 7-14 days of automatic coverage for any new vehicle. This should be only used as a last resort, as being stopped by the police during this period will raise many questions and may require you to supply the bill of sale and other documents to prove the vehicle is adequately insured.

Also, if you experience an accident or claim during this grace period, settling any claim will also be significantly more complicated. Lastly, you should also be aware that only the coverages and limits that you had for your previous vehicle will transfer automatically to your new one. So that means if you didn’t have comprehensive coverage for things such as fire, theft, and vandalism – your new car won’t have that coverage either. That’s why it’s important to figure out how to check insurance before buying a car.

If possible, always contact your insurance provider before signing a contract to buy a new vehicle. They can provide you with a quote that can be made into a live policy as soon as you commit to purchasing the vehicle so you are insured before driving off the lot.

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How soon after buying a car do I need insurance?

The short answer is that you should ensure that you have a valid auto insurance policy and a pink liability slip before you drive the vehicle off the lot. It is illegal to drive a car without insurance. If you’re purchasing a new or used vehicle at a dealership, especially if you are buying the car with a bank loan or lease, your lender will require proof of insurance before taking ownership of the vehicle.

Knowing how to check insurance before buying a car will make the process a lot smoother! If you are buying the vehicle privately, you should ensure that you contact your insurance provider before driving the vehicle home.

Your insurance professional will ask you a series of questions about the vehicle, such as who will drive it as well as how you plan on using the new car- all of which may impact your insurance premiums. They will then provide you with a quote to insure the new vehicle and ask whether you‘ll be removing any previous vehicle from your policy. Once you arrange for payment of the new policy, they’ll email you a new “pink” liability slip, proving that you have proper insurance coverage on the vehicle.

If it’s not possible for you to contact your insurance provider before you drive your new car, your auto insurance policy likely provides you with 7-14 days of automatic coverage for any new vehicle. This should be only used as a last resort, as being stopped by the police during this period will raise many questions and may require you to supply the bill of sale and other documents to prove the vehicle is adequately insured.

Also, if you experience an accident or claim during this grace period, settling any claim will also be significantly more complicated. Lastly, you should also be aware that only the coverages and limits that you had for your previous vehicle will transfer automatically to your new one. So that means if you didn’t have comprehensive coverage for things such as fire, theft, and vandalism – your new car won’t have that coverage either.

If possible, always contact your insurance provider before signing a contract to buy a new vehicle. They can provide you with a quote that can be made into a live policy as soon as you commit to purchasing the vehicle so you are insured before driving off the lot.

 

Should I compare different insurances before buying a car?

Whether you’re buying a new car or a used one, it’s always a good idea to compare quotes from different insurance options before buying a car because there are a lot of options available to you. When shopping for insurance there are several things you should consider before deciding which company to choose.

Price – While shopping around for the best price on car insurance is something many people do, there are a few guidelines you may want to consider as you obtain different quotes. Be sure that you are comparing apples to apples when it comes to car insurance quotes. This means checking that you’re being quoted the same coverage by each insurance company, including policy limits, deductibles, and optional coverages. This is especially true when considering some of the more expensive optional coverage such as comprehensive and collision coverage. Some car insurance estimator tools may be used as a general reference point.

Service – Different providers offer different types and degrees of service. Levels of service can run from experiences completed entirely online to those that take place by phone or in person. It can be extremely frustrating to find yourself unable to reach anyone after experiencing an accident. Do your homework so you won’t feel deserted when you need your company the most.

Claims experience – One of the easiest ways to offer cheap insurance is to nickel and dime your customers when they file a claim. Before buying that low-priced policy, find out what other customers thought about the insurer when they experienced a claim by checking out surveys such as the 2019 J.D. Power Claims Satisfaction Survey and similar surveys compiled by others. Also ask your friends and social networks their experiences. Although this information is anecdotal, you may start seeing some trends and hear some first-hand accounts.

What types of insurance are there for first-time car buyers?

Every driver in Ontario and Alberta purchases the exact same standard insurance policy, which is then modified with different limits, deductibles, and optional coverages to suit your needs. The same is true whether you’re a brand-new driver or one who has been driving for decades.

That means first time car buyers will be covered by the same insurance protection everyone else holds. When purchasing insurance for your first car, your insurance provider will ask you questions about the vehicle, your postal code or where you’re located and how you intend to use the car (such as whether you will use it only for pleasure or intend to commute to work each day.) You will also be asked about the drivers of the vehicle, including their age, driving record and any previous claims activity.

This information will be used to create a policy quote for you that includes the standard policy plus any optional coverages you have chosen to purchase. You can find more information on this topic by visiting Useful First Car Insurance Tips.

 

How old do I have to be to get insurance for a new car?

When it comes to insuring a new car, how old you are is not so much a factor. The main rule that you should be aware of is this – only the registered owner of the vehicle is able to obtain insurance for that new car. If you already have an insurance policy, adding your new vehicle to that policy shouldn’t be an issue.

In the case where you’re currently a listed driver on someone else’s policy, you won’t be able to add your new car to this policy because the owner of the car, and the owner of the car insurance have to be the same. But keep in mind that having this insurance experience under your belt could help you out when getting your new policy because you’ll have some insurance history and experience.

However, an auto insurance policy is a legal contract and only someone who has reached the age of 18 can sign a contract in Canada. If you are under that age, the policy will need to be in the name of your parent or guardian. Once you turn 18, you can convert the policy to your name

 

 

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