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New Car, New Car Insurance Coverage

  

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Presidents Day Weekend is right around the corner and with it comes a lot of hoopla about car sales. Ever wonder how the holiday became synonymous with automotive selling? 

According to the Boston Globe, the tradition, started about a century ago, when car dealer Alvan T. Fuller held a Washington's Birthday "open house" to promote sales of Cadillacs and Packards at his dealership on Commonwealth Avenue.   It turned out to be a success.

Thanks to Mr. Fuller, you could score big on a new car during a President's Day sale. But before you drive away from the car dealership with that nice new vehicle, you need to make sure that you get it insured. 

If you drive off the lot without notifying your auto insurance company of your new vehicle purchase, you may still be covered. If you traded in your old vehicle or purchased an additional vehicle, many Massachusetts insurance companies will cover your new vehicle for 7 days after you make the purchase. 

You definitely need to contact your insurance agent as soon as possible, however, to let him/her know of the transfer. If you are buying a used car you may be required to have it undergo a pre-insurance inspection and your agent will tell you if it needs the inspection and where to take the car. If the inspection is required but not done, your comprehensive and collision coverage will be canceled. If you have a loan on the newly-acquired car the lienholder will insist that you carry comprehensive and collision coverage, coverage which you may not have had on the traded-in car. To be properly covered, you must apply for any additional coverage before you take delivery. Even if you already have comprehensive and collision on your old car, you need to tell your agent about the newly-acquired car because the policy will automatically terminate 30 days after you trade in your old car.

Don’t assume that the insurance coverage you had on your old vehicle will be sufficient for your new vehicle.  The limits on your old policy might not be high enough or you might want to add additional coverages such as rental and towing that were not on the old policy.  You should always review your car insurance policy when purchasing a new vehicle.