When you purchase a new car, you will need to have insurance in order to drive it. However, some people are confused about whether they should transfer their existing policy to their new car or cancel their current policy and buy a brand new one. Below, we explain how to make this choice.
Switching your car insurance coverage to another car vs. buying a new car insurance policy
When debating between switching your auto insurance to a different car or buying a new policy outright, there are several factors to consider. For example, the terms and conditions, price, and deductible of the policy, along with your personal needs and preferences should all be considered.
Why do I need to change my auto insurance policy when I buy a new car?
When you purchase a new car, you will likely be required to change your policy, whether you decide to transfer your existing insurance or buy a new policy altogether. This is because the make, model, and year of the vehicle you drive have a direct impact on your car insurance premium.
Therefore, if you change your vehicle, your insurance rate is likely to change along with it. Unless you purchase the same car, you will need to transfer or purchase a new car insurance policy. Plus, changing your policy along with your car is usually wise, especially if your new vehicle has a higher value than your older vehicle. For example, if your new vehicle is new or expensive, you may wish to purchase optional car insurance add-ons like comprehensive or collision coverage for extra protection.
The benefits of switching insurance coverage to another car
The main benefit of switching your current auto insurance policy to a new car as opposed to buying a new policy is that it is convenient. Doing so saves you time and possibly even money. Since you are already familiar with the insurance company, contacting them about your new car to request an updated quote should be easy.
From there, you can obtain quotes from a few other insurance companies to compare (or have a trusted broker from BrokerLink do this for you). With the updated quote from your existing insurer and the new quotes from BrokerLink, you have all the information at your disposal to make the best possible decision.
If you decide to stick with your current provider, you can contact them saying you would like to move forward with the quote provider and wish to transfer your car insurance to your new vehicle. Going this route, as mentioned above, is usually the most convenient option. You don’t have to apply for a new policy, reducing the amount of time it takes to have your new vehicle insured and be able to hit the road.
Key considerations when transferring auto insurance to a new car
Before buying a new car, take the time to consider other aspects beyond which car you want. For example, we recommend that all drivers familiarize themselves with the process of registering a new car and think carefully about what type of car insurance coverage is needed to protect their new vehicle. The following tips and key considerations can ease the process of buying a new car and deciding how to insure it:
- The cost of transferring your insurance policy: If you contact your existing insurance company and receive an updated car insurance quote that is out of your budget, try not to panic. While staying with your existing provider is usually the most convenient option, it is not your only option. Contact a reputable insurance brokerage like BrokerLink where a broker can shop around and obtain quotes from Canada’s top insurance companies on your behalf. With these quotes in hand, you can make an informed decision about your car insurance. In some cases, cancelling your existing policy and buying a new one might be the most economical option.
- Don’t let your coverage lapse: When debating between auto insurance coverage options, make sure you leave enough time to decide before your coverage lapses. Lapsed auto insurance coverage can have serious consequences. Not only does a gap in your insurance history look suspicious to insurance companies but lapsed coverage prevents you from driving your car. Therefore, maintaining insurance coverage should be your top priority, even if it means having two cars covered under your policy for a short period.
- Familiarize yourself with the process of registering a new vehicle: Contact BrokerLink to learn more about the process of registering a new vehicle in your province or territory. One of our expert brokers can inform you of the information and documents you will need to provide when registering a new vehicle, such as the vehicle's manufacturer and model year.
- Request a copy of the insurance policy transfer: If you decide to transfer your existing policy to your new car, request a copy of the insurance policy transfer from your insurance company. Keeping a record of all contracts and policies can come in handy down the road.
- Before purchasing new coverage or transferring your policy, contact an insurance brokerage: Insurance brokerages work to serve their clients. For example, when you contact BrokerLink, you are assigned a dedicated insurance advisor who will take the time to understand your needs and find the best policy for you.
How to transfer your insurance to another car
Ready to switch your current car insurance policy from your old vehicle to your new vehicle? Follow the step-by-step guide below:
1. Consider your coverage options
Your new car may require different coverage than your old car, so consider your coverage options carefully. Too little insurance can have serious financial ramifications, but too much coverage can lead to overpaying. Contact BrokerLink for advice on how much insurance coverage to purchase for your new vehicle.
2. Research penalties for policy cancellations
Before contacting your insurance company about switching your policy, find out if there are any penalties. Some insurance companies charge cancellation fees for changing a policy before the end of the coverage period.
3. Compare auto insurance quotes from multiple insurance companies
Shopping around is crucial to getting a great rate on car insurance. Do not simply accept the updated quote your insurance provider gives you without doing your due diligence. Contact a brokerage like BrokerLink that can help you obtain and compare quotes to ensure you are getting the best coverage at the best rate.
4. Contact your current insurance company
After you have obtained quotes from other insurance providers and have a reasonable idea of what auto insurance for your new car could cost, contact your current insurer. Ask them for an updated quote in the event that you decide to switch your existing insurance. In addition, find out if you are eligible for any discounts or other savings opportunities.
5. Make sure your old car insurance policy is cancelled
Once you have decided whether you want to transfer your existing policy or buy a new one, make sure that your old car insurance policy is cancelled. Many drivers assume that their old policy is automatically cancelled after switching their car insurance to a new provider, but this isn’t the case. Contact your old insurance company to confirm that your policy is cancelled and you do not want to renew it.
Contact BrokerLink to learn more about switching car insurance to another vehicle
Still have questions about the process of switching auto insurance to another car? BrokerLink is here for all your car insurance needs. We can help you shop around for a new policy or simply answer your questions about the process of transferring an existing policy to a new car.
Give us a call, send us an email, or visit us in person to get started today. You can also take advantage of BrokerLink’s free car insurance quotes by using our online quote tool now. We can’t wait to hear from you!
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