If you’re looking to purchase your first automobile ever, you may be wondering, “How does auto insurance cover new car owners for third-party accident damages or bodily injuries?” You must start by carefully researching your specific car insurance requirements. In all states, it’s illegal to drive without insurance or some form of proof that you’re capable of compensating any victim of a car accident that you cause.
Here are some important considerations to get the right insurance coverage for your new car.
How to Insure Your First Car
If you’re buying a car for the first time, rather than replacing an old one, you’ll need to purchase liability insurance. Every state requires it, except New Hampshire, which mandates drivers to prove that they have the financial capacity to cover any auto accident damages or losses for which they’re liable.
Auto liability insurance protects you as the covered driver if you’re at fault for a car accident in which:
- The other driver, the other driver’s passengers, or a pedestrian sustains bodily injury
- The other motorist’s car is damaged
- The third-party’s property is damaged, such as a mailbox or section of a house
Insuring Your First Car: Guide for Teens
What if you have a first-time teen driver in the house? Young drivers need auto liability protection too, especially with their limited driving experience. As a parent, you can add the new young driver to your existing auto insurance policy. Teens may also carry their own auto liability insurance under their name.
Getting Auto Liability Insurance When Replacing Your Old Car
You may enlist your insurance agent to help set up the necessary liability protection if you decide to replace your car with a new or used one. However, can you still drive your new vehicle off the lot if you’re unable to get the required coverage right away? In such a scenario, your existing policy may apply, temporarily.
If your insurer offers a grace period, you may drive your new car without an updated liability policy under the following conditions:
- You own an insured car
- You’re transacting in cash
- Your current auto liability policy allows you a time window to report a newly bought car
Any temporary coverage for the new car covers you up to the limits of the existing policy. So, if you need to increase the limits or add coverages, such as collision or comprehensive, you’ll want to update the policy accordingly.
Understanding Insurance Terms or Provisions for Your New/Used Car Loan or Lease
Does your leasing contract have a “forced place” clause? This provision lets the leasing company set up your auto liability coverage and add the cost to your monthly fee if you don’t demonstrate financial responsibility proof of insurance within a specified time frame.
It’s also essential to think about getting GAP coverage for your car loan or lease. The extra cover pays for the difference between the amount you owe on your car and the value of the car at the time of a covered loss, such as an accident or theft. If you intend on buying a car this weekend or sooner, consider talking to your insurance agent about purchasing the necessary auto liability coverage.
These are some of the essential auto liability insurance considerations when buying a car. Do you have any questions about getting the right coverage for your new or used vehicle? Ensure you have the right auto insurance in place. Visit the professionals at McCarty Insurance to get started on your tailored coverage. We can help you understand the ins and outs of your chosen policy.