Insurance Grace Period When Buying A New Car
If you already have a vehicle, you may be able to purchase a new car without purchasing a new auto insurance policy. Most insurance companies offer a grace period for new vehicles, where any new cars you buy will be covered under your existing policy for a short time. This period varies with each insurer. For example, Progressive gives drivers 30 days to add a new car to their policies, while other insurers may give you less than a week.
Before you buy your new car, make sure you know the length of your grace period and what you need to bring to the dealer to prove you’re eligible for that temporary coverage. Once you’ve bought your car, don’t forget to add your new car to your policy before your grace period is up. Even a short lapse in insurance coverage can make a lasting impact on your insurance rates.
If you don’t already have car insurance or you’re changing insurers, you must purchase a new policy before you drive your car home you can’t “back-date” insurance to apply retroactively.
Alternatively, in a few states you can buy a short-term insurance policy, also referred to as “seven-day” or “30-day” policies. Short-term insurance is intended to give you time to shop around for the lowest insurance rate. Unfortunately, short-term insurance is often significantly more expensive than a normal policy, reducing your net savings.
What Other Coverages Are Offered
There are many types of car insurance coverage available, including:
- Umbrella Policy: If you dont think that the highest levels of bodily injury and property damage liability would be enough to protect your assets in a severe accident, you might want to purchase an umbrella policy. Umbrella policies provide a minimum of $1,000,000 in liability coverage above and beyond your standard auto insurance liability limits.
- Rental Reimbursement: Rental reimbursement pays for your rental car while your car is in the repair shop because of an insured loss.
- Roadside Assistance: Roadside assistance covers the cost of tow trucks, locksmith services or basic repairs on the side of the road.
- Non-Owner Insurance: If you dont own a car, but you still drive occasionally, you might need a non-owner insurance plan to provide liability coverage in case of an accident.
- Usage-Based/Pay-As-You-Drive Insurance: Your car insurance company can record your driving information, such as speed and mileage, and offer you discounts on your coverage for being a better driver. This may have unintended consequences, however, so its good to do your research before buying.
A good minimum liability coverage level is 100/300/100. Keep in mind, many insurance companies offer much higher levels of coverage, with 250/500/250 as policy options by several insurance companies across the country.
Why You May Not Need Extra Car Rental Insurance
According to CardHub.com, people often end up purchasing supplemental insurance protection that isn’t truly necessary. This can increase the cost of renting a car by $15 to $30 per day. If your own insurance policies don’t include rental car coverage, you probably have some form of coverage from your credit card. All major credit card issuers, including Visa, Mastercard, American Express, and Discover, offer rental car insurance. However, Mastercard has several cards that don’t provide any coverage.
CardHub rated the major credit card issuers based on the length and extent of rental car insurance coverage they provide, clarity with which they state their coverage details, and ease of getting claims paid. The grades are as follows:
- American Express 90 percent
- Mastercard 79 percent
- Visa 74 percent
To make sure you’re covered, you have to use your credit card to pay for your car rental and decline the supplemental collision damage insurance the rental company offers. If you purchase that insurance, you won’t get coverage from your credit card company.
Additionally, some credit card companies only offer insurance for a maximum duration of 15 days. No card issuer provides coverage for more than 30 days in a row. In some countries, rental cars don’t qualify for credit card insurance. Examples of these countries include:
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Why Should I Get Car Insurance
Are you considering car insurance but not sure if its worth it?
Insurance can be a tough and confusing topic, and for this reason, well break the five most important benefits of having auto insurance into understandable chunks. Even though some people might think that insurance is unnecessary or too pricey they will come to realize that without protection they could end up getting seriously screwed. Dont be left in the dark read on to find out more!
1. Protection from economic loss: What good would having a totalled vehicle do you if you dont have enough money saved up for repairs or a new car? Insurance provides financial protection by giving you reimbursement towards your deductible minus any applicable taxes and fees. This protects your assets by increasing resale value due to not having that financial burden of paying for repairs/car replacement.
Small claims court if you are involved in even a minor accident, your insurance company will likely payout to the other party directly. If their insurance doesnt have enough money to cover the claimants damages, the claimant can sue you personally! Protection from economic loss by having car insurance is important because it helps individuals save up enough funds so they dont get stuck with massive bills or lose assets due to lack thereof.
When Should You Buy Rental Car Insurance
There are certain situations where buying auto insurance from a rental car company may be a wise decision. These situations include:
- You have inadequate or no auto insurance: If you don’t have car insurance or comprehensive and collision coverage or have very high deductibles, it’s a good idea to get LDW from your rental car company. If you don’t have any auto insurance at all, you should also purchase supplemental liability.
- You’re on a business trip: If you’re traveling for both business and pleasure and your employer doesn’t provide rental car insurance, find out from your own auto insurance provider whether your policy includes coverage for rental cars. If you’re renting a vehicle mainly for business, it’s likely that you won’t get any coverage from your personal car insurance policy.
- You’re renting a car abroad: Your auto insurance policy probably won’t provide rental car coverage in most foreign countries. While you may get some protection from your credit card company, make sure the country you’re visiting isn’t specifically excluded.
- You’re concerned about a rental car accident impacting your insurance rates: If you file a claim, your insurance rates are likely to go up. You won’t have to worry about this if you buy insurance from your rental car company.
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Things You Should Know About Auto And Car Insurance
Whether you shop online or use an agent, buying an auto insurance policy is complicated.
While the internet makes it simple to compare policies and rates, its still easy to get confused by all the unfamiliar terms and jargon insurance companies use. The decision-making process is also clouded by longstanding misconceptions or myths about how insurance works.
For example: A lot of people mistakenly believe red cars cost more to insure.
Thats not the case. What drives up rates are things like speeding and accidents, said Loretta Worters, vice president of media relations at the Insurance Information Institute. So, if you have a red car and you speed and get a ticket, or have an accident, those are reasons for a rate increase, not because you drive a red car.
Insurance companies consider a lot of factors about the vehicle when setting their premiums including the make and model, age, body type, engine size, the cost to repair and the likelihood of being stolen but not the color.
Here are seven things you should know about auto insurance.
What Other Types Of Auto Insurance Coverage Are Typical
While most basic, legally mandated auto insurance covers the damage your car causes, it does notcover damage to your own car. To cover your own car, you should consider these optional coverages:
- Collision reimburses you for damage to your car that occurs as a result of a collision with another vehicle or other objecte.g., a tree or guardrailwhen youre at fault. While collision coverage will not reimburse you for mechanical failure or normal wear-and-tear on your car, it will cover damage from potholes or from rolling your car.
- Comprehensive provides coverage against theft and damage caused by an incident other than a collision, such as fire, flood, vandalism, hail, falling rocks or trees and other hazardseven getting hit by an asteroid!
- Glass Coverage provides coverage from windshield damage, which is common. Some auto policies include no-deductible glass coverage, which also includes side windows, rear windows and glass sunroofs. Or you can buy supplemental glass coverage.
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What Is Supplemental Liability Insurance
Liability insurance typically covers damages to other people’s property as well as medical costs for other peoples injuries in an accident you’re legally responsible for.iii In the U.S., every state requires a minimum amount of liability insurance on car insurance policies, so you may already have liability coverage through your personal auto insurance.
Collisions With Other Cars
Even if you get into are involved in an accident with another car and it was their fault, you may be able to get back on the road faster and with less of a headache by filing a claim with your own insurance company. Thats exactly what Lila did when her husband was hit.
Right off the bat, our insurance company stepped in and started the repair work. If we had to deal with their insurance company, Im sure it wouldve made it take a lot longer. Whereas, because we had the insurance, they just dealt with it for us and went after the person who was at faults company.
You can also use this coverage if your car has been damaged in a hit-and-run scenario.
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Do You Need A Collision Damage Waiver
Its wise to purchase this type of rental car insurance. While your regular car insurance policy may include collision coverage for rental cars, it most likely includes a deductible and may not pay for all the rental car company’s charges, such as loss of use .ii Your credit card may include free collision damage coverage, but credit card rental car insurance is typically secondary coverage, meaning any claims will go first to your auto insurance company.
The most affordable way to ensure adequate protection in case of collision or theft is with third-party rental car insurance. The Rental Car Damage Protector from Allianz Global Assistance provides affordable collision loss/damage insurance coverage up to $75,000.
Unlike the waivers rental car agencies sell, the Rental Car Damage Protector is actual insurance that can protect your rental car almost anywhere in the world.
Cost Of Car Insurance
The amount you pay each year for insurance is called a premium. The insurer works out your premium by estimating how likely it is that you’ll make a claim.
You may also have to pay an excess when you make a claim. The excess is the amount you agree to contribute towards the cost of a claim.
The premium and excess you pay will depend on your policy and on other factors, such as your age. For example, a driver under 25 may have to pay a higher excess. This is because people under 25 are involved in more accidents.
If youre struggling to pay your car insurance premiums or excess, contact your insurer straight away. Explain your situation and tell them you would like to apply for financial hardship.
For example, they may provide assistance to meet your excess if you have an accident and you’re at fault and need to make a claim.
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The Six Types Of Car Insurance
- Liability: Pays for other peoples expenses after an accident. Required in nearly every state.
- Collision: Pays to repair or replace the policyholders car after any accident, regardless of fault. Only required for leased or financed cars.
- Comprehensive: Covers damage to the policyholders vehicle caused by something other than an accident. Only required for leased or financed cars.
- Personal Injury Protection: Pays for the policyholders direct and indirect medical expenses after an accident. Required in 13 states.
- Uninsured/Underinsured Motorist: Covers vehicle damage and medical expenses after an accident with an uninsured/underinsured driver. Required in 20 states.
- Medical Payments: Pays for the policyholders direct medical expenses after an accident. Required in two states.
Third Party Fire And Theft
As with third party insurance, this covers other people but it doesnt protect you if your own car is damaged.
Where it differs is that it covers repairs or replacement if your car is stolen or damaged by fire.
Again, its not necessarily cheaper than fully comprehensive cover always compare prices.
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The Four Types Of Rental Car Insurance Explained
Here it comes across the counter: the contract you have to sign to get your rental car. The salesperson is pushing you hard to buy rental car insurance as your pen hovers over the paper. Collision damage waiver? Personal accident insurance? Do you need all this stuff? What does it even mean?
Don’t check any boxes yet! Whatever the salesperson might say, these coverages are optional and if you get them all, they can add up to $30 per day to the rental bill.i You want to be protected, but there’s no sense in paying extra for coverage you already have. We’ll explain the different types of rental car insurance and tell you what you really need.
Dont Pay For What You Dont Need
Check what cover you have under other financial products. For example, some current account packages include car breakdown cover.
Sometimes your insurer or broker might try to sell you add-ons, such as legal expenses cover. You might be able to get these products more cheaply elsewhere, or you might not need them at all.
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Renewing You Car Insurance
Get quotes from a few other insurers to check you’re getting the best deal. You may end up paying more by staying with your current insurer.
Nathan’s lack of car insurance gets him into debt
Nathan decided not to get any insurance because his car is very old.
A few months later, he hit a brand-new sports car, which needed $20,000 worth of repairs.
Because he’s not insured for damage to other cars, Nathan has to take out a personal loan for $20,000 and work extra hours to pay off the debt over five years.
Laws Require Minimum Coverage But You Might Need More
The next time you’re on the freeway, think about this: Approximately one of every eight U.S. drivers on the road has no automobile insurance, according to the most recent estimate from the Insurance Research Council. With that many people driving without coverage, it’s more important than ever for you to be insured. But the real questions are how much car insurance do I need and what recommended car insurance coverage should I buy?
Your inclination might be to get the minimum insurance coverage required by law in your state. But that might not fully protect you or your assets if you’re at fault in an accident.
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How Should You Save Money On Car Insurance
In order of impact and potential savings, we suggest the following steps for drivers trying to save money on their car insurance bills:
- Shop around. You will see that the rates major insurers charge the same driver in the same car can vary by hundreds, sometimes thousands, of dollars. See how much average car insurance rates can differ in your neighborhood by entering your ZIP code into our comparison tool.
Ways To Save Money When Shopping For Car Insurance With Geico
Geico does not offer any specific discount to drivers with particular occupations or hobbies. There are, however, discounts that can be achieved by signing up online and paying over the phone instead of in person. If the address on your license is different from where you live, you can get a discount as well as if you own your car outright. Geico also offers a limited number of discounts for drivers who experienced life changes such as buying a new car or home, going through a divorce, etc.
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How Prices Are Determined
Each insurance company has its own formula for calculating premium prices, but they all tend to use the same basic factors. These include obvious ones, such as the make and model of the car, how you use the vehicle and your driving record.
Other factors that go into the mix include:
- Your age, gender and marital status: Statistics show young drivers and male drivers are more likely to have an accident. Married drivers, on the other hand, are less likely to file an accident claim.
- Where you live: Someone who lives in an urban area with a high crime rate is most likely considered a bigger risk than a policyholder in a rural area with less traffic and fewer car thefts and break-ins.
- Your credit score: In many states, insurance companies can consider when calculating premiums. The industry says its data shows that drivers with better credit have fewer accidents. Consumer advocates believe this unfairly penalizes lower-income car owners and they want the practice outlawed.