Generally speaking, you should have car insurance in place before you actually buy a car. As it is with almost all insurance matters there are some exceptions. Understanding the rules when it comes to making a new car purchase will ensure you do not break any laws. Take a look at some circumstances when you do and do not need to have car insurance in place to buy a car.
When Do I Need Car Insurance
- Buying a Car from a Dealer
Buying a car from a dealer is the number one time when you will need car insurance to buy a car. Most car dealers will not allow you to drive off the lot without a copy of your proof of insurance. Many car salesmen will actually call your insurance company and add the vehicle to your policy on your behalf. It can be helpful, but you ought to verify the coverage is listed the way you want it and any other changes are made properly. If you pay cash, the dealer may not verify your insurance, but it is certainly still a good idea.
- Buying a Car from an Individual
Buying a car from an individual means you are on your own. It is your responsibility to get the vehicle insured as soon as possible.
- Antique / Not Driveable
- Your current insurance policy offers automatic 30 days of coverage for newly purchased vehicles
When is it ok to delay insuring a newly purchased vehicle?
An antique or a vehicle which cannot be driven does not need to be insured if towed and stored in a garage. Of course that means you will not have any coverage if any damage occurs to the vehicle while towed or stored. Homeowner’s insurance policies never cover automobiles in Michigan.
Most preferred insurance carriers offer 30 days of automatic coverage for a newly purchased vehicle. The coverage extended is that of which vehicle has the most coverage currently on your policy. Meaning if you only have liability coverage on your current policy, that is all that will be extended to your new purchase. Plus, you could still have a difficult time filing a claim on a vehicle which has not yet been added to your policy. Proof of purchase will need to be supplied and delays are possible. It is definitely recommended to ask your insurance agent about any kind of automatic coverage. Never assume anything when it comes to car insurance.
To legally drive in Michigan, the state minimum coverage is required on all vehicles. To get a vehicle titled proof of insurance is required. Get the vehicle identification number of the vehicle you are purchasing and call your insurance agent. Let them know you are in the process of purchasing the vehicle. If the deal falls through, notify your agent and the vehicle can be removed as if it never happened. Add car insurance when buying a car as soon as possible to ensure you are protected in case of a loss.
Learn More About Michigan Car Insurance Coverage
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