Purchasing Insurance for a New Vehicle
April 28, 2022
Purchasing a new car is an exciting endeavour, but it also brings on a host of potential risks. With new cars, we tend to be more cautious about the ways we use them, parking them well away from other vehicles to avoid dings and scrapes, and generally being more mindful as we coast from point A to point B. Try as we might to prevent them, things can happen. Therefore, it’s crucial to make certain that your shiny new vehicle is adequately insured before you take it out on the road.
If you’re a new car owner, or perhaps this is your first time purchasing a car brand-new, there’s a few different things to note about insuring a novel vehicle. You already know that it’s illegal to operate a motorized vehicle in Ontario, and the rest of Canada, without insurance – that’s a no-brainer. There are significant penalties for drivers who are caught without insurance, and uninsured drivers can cause insured drivers’ premiums to rise to cover the cost of claims country wide. In fact, driving without insurance can cost you as much as $25,000 for a single offense, and your license will be suspended for 30 days. For a second offence, you’re looking at a year-long suspension and a fine of between $10,000 to $30,000. Your vehicle may also be taken away for up to 3 months.
You need insurance on a new car, bottom line. Here’s how to get it:
Step-by-step: how to add insurance to a new car.
Before you apply for a quote, be sure to collect the following information to have at the ready:
- Write down your new car’s year, make, and model.
- Note the VIN (vehicle identification number.)
- Do some math – your prospect insurance carrier will want an average annual commute distance to gauge your typical overall travel.
- Summarize your driving record and past claims.
- Note any additional drivers, such as your partners or licensed children.
- Determine your overall coverage needs, including third-party liability coverage and options for collision and comprehensive. The latter two coverages are always debatable, but they’re worth their price over and over for a new vehicle.
Now, you’ll need to apply for a quote. Excalibur Insurance Group offers a great way to get quotes through our Rate Reducer, where you can get your 10 lowest auto rates in real time online.
Adding an additional car to your existing policy.
If this is not your first time owning a car and you already own a vehicle, you might be wondering how to go about adding an additional vehicle to your policy. Typically, when you have an existing policy, carriers will automatically provide coverage for 2 weeks. That being said, if you want to be on-top of things, you should call up your insurance broker or representative about the fact that you are adding a new vehicle to your policy before you even pick up the shiny new one.
Sold your old vehicle? Tell your broker. Especially if your vehicle is older, your existing policy is not likely to be sufficient to cover your current car. Moreover, you’ll want to be sure you’re meeting Ontario’s auto insurance requirements.
Can’t I just put the old license plate onto the new one?
Transferring your license plate does not transfer your coverage. You can technically transfer plates, which a dealership can do for you, but this has nothing to do with insurance.
This is because your coverage and rates are determined by the car you drive. Your new car is likely a different make, model, year, etc. – so it needs insurance for adequate protection.
Dealerships will require you to have insurance before leaving the lot.
A dealer may have insurance for the cars in their lot, but they’ll have you provide proof of your insurance before you are allowed to leave the lot, especially if you are going to be leasing or financing your vehicle (where you might be required to carry specific coverages.) If you aren’t sure if your new car has enough insurance, Excalibur Insurance Group’s experts are willing to discuss your vehicle and your needs with you. It is highly advised that new vehicles come with the added purchase of a Limited Waiver of Depreciation Endorsement, which will protect you against the loss of depreciation to your new car in the event you are involved in an accident where the vehicle is written off.
Leasing is an excellent option if you want to drive a new car but you’re on a tighter budget. Leasing only requires you to pay for the value of the car that will depreciate over your leasing period. However, with leasing, a lending company may require you to carry specific coverages – namely, collision and/or comprehensive. This is to ensure that their asset is secure.
If you’re looking to purchase a new vehicle, great! It’s an exciting time. Give Excalibur Insurance Group a call to discuss how to go about insuring your shiny new ride or start by applying for a quote.