When do you need car insurance
Do I need insurance before I buy a new car?
Do I need insurance before I buy a new car? If so, how will I know what car to tell my insurance agent if I haven’t made up my mind?
From the archives
Feel free to sign the papers without insurance, but the dealer won’t let you take a new car home without some proof of coverage. You don’t need coverage for the specific car, just proof of an active policy from a trade-in or other car that will be updated to cover the new car. The pre-existing coverage will insure your new car for a set time -- 30 days, for example.
If you don’t have pre-existing coverage, you’ll need to contact an insurance company before the purchase and let them know what kind of car you’re looking at. You’ll need to have some idea of what car you plan to
purchase (price range, midsize car, truck, etc.) but you probably won’t need the specifics, like model year or vehicle identification number, immediately. They’ll be able to provide temporary coverage until a formal policy is accepted.
We talked to State Farm, and a representative there said there’s no reason to keep your existing agent in the loop on which car you’re going to buy prior to making a decision. It is a good idea, though, to get estimates from your agent so there are no surprises when it’s time to pay the premium.
Just be sure to update the policy as soon as possible after taking the car home. Sooner or later the bank or finance company you borrowed from will be asking for proof of insurance on the exact vehicle, mainly because it’s their car until you pay it off.
Answered by David Thomas on April 11, 2007 in I'm Just Wondering | PermalinkSource: ask.cars.com