Buying A New Car Insurance: Grace Period in Alberta
5 minute read Published on Nov 3, 2022 by BrokerLink Communications
Buying a new car is exciting, especially if it’s your first-ever vehicle. The process can also be overwhelming, especially with so many makes and models to consider, not to mention other factors like car insurance. To drive your new car in Alberta, you will need to purchase an auto insurance policy that meets the province’s minimum requirements.
The amount of time between when the insurance premium payment is due and when the policyholder can make a payment without coverage lapsing is known as the grace period. Continue reading to learn more about car insurance grace periods in Alberta.
What is an auto insurance grace period?
An auto insurance grace period is defined as the amount of time after an insurance premium is due that the policyholder has to make their premium payment without facing the penalty of lapsed coverage. Grace periods vary considerably across Canada and around the world. They can be as short as 24 hours from the premium due date or as long as 30 days.
What is the grace period on a new vehicle in Alberta?
The province of Alberta has a 14-day grace period for auto insurance. However, there are a number of limitations to this grace period. For example, the insurance will only go by the coverage that the policyholder currently has. Keep in mind that the minimum amount of third party liability coverage required by the province of Alberta ($200,000) is usually not enough to cover the cost of a major accident, especially one that results in death or injury.
Can I buy a new vehicle without auto insurance in Alberta?
Yes, you can purchase a new car in Alberta without auto insurance however, you cannot drive the new vehicle until you obtain a valid, up-to-date car insurance policy that complies with provincial requirements. It’s important to remember that driving without auto insurance anywhere in Canada is illegal.
In Alberta, uninsured drivers who are caught face penalties from severe fines and licence suspensions to jail time. And these consequences increase if you are caught driving without insurance a subsequent time. Therefore, the best way to avoid the pitfalls of driving uninsured is to purchase a comprehensive car insurance policy with the help of a trusted broker from BrokerLink.
How a grace period works in insurance
Insurance grace periods are intended to protect policyholders from immediately losing coverage in the case of a late or delayed payment. From an insurance company’s perspective, they want the grace period to be as short as possible to prevent a situation where they are obligated to pay out a claim when they haven’t received payment from the policyholder. However, as long as a policyholder has an insurance grace period in effect, the insurance company will be responsible for providing them with the services purchased.
Do you need to inform your insurance company about your new vehicle?
Yes, policyholders must inform their car insurance providers about a new car purchase. This is the only way to ensure you are covered in the event of a collision in Alberta. Since car insurance is based on a number of factors, including the type of car you drive, buying a new car can impact your insurance premium. You don’t want to get into an accident in your new car only to find out that your coverage no longer applies.
Registering a new car in Alberta
If you recently bought a new car in Alberta, you have two options. The first is to install your old car’s licence plate on your new vehicle, and the second is to purchase a new licence plate and register the vehicle.
If you want to use your existing licence plate, you can. However, only for a set time. In Alberta, drivers are only allowed to use their existing licence plate and registration for a maximum of 14 days. During this time, you should have a copy of your proof of ownership and proof of insurance in case you are involved in an accident.
After this 14-day period has passed, you will need to register your new vehicle with the province. To register a new car in Alberta, drivers must be prepared to pay the applicable fees and show the following information:
- Proof of ownership
- Proof of insurance
- Personal identification
The benefits of Alberta auto insurance
There are many reasons that Alberta drivers choose to purchase auto insurance, beyond it being required. Car insurance offers a level of financial protection you won’t get anywhere else. Continue reading to learn a few more benefits Alberta drivers may derive from their car insurance policies:
You are protected in case of bodily injury
If you are injured in a car accident, auto insurance can help. Most car insurance plans in Alberta include bodily injury coverage, so if you require medical attention because of an accident, you can seek compensation to cover the cost of medical expenses like prescription medications, rehabilitation, physical therapy, and more.
You are protected in the event of an accident
Accidents happen every day, even to the safest of drivers. To prepare yourself for the possible reality of a car accident, purchase car insurance. Car insurance often includes coverage to help with the costs of repairing or replacing your vehicle if it is damaged in an accident.
You are protected in case of theft
Some car insurance policies protect the policyholder and their vehicle against theft. In the event that your car is stolen, your insurance company would help cover the costs of replacing it, rather than having to pay for a new car out of pocket.
You are in compliance with the law
One final benefit of purchasing Alberta auto insurance is that in doing so, you comply with provincial law. Uninsured motorists can face serious consequences in Alberta (including fines, jail time, and a suspended driver’s license). Avoid the risk of such penalties by purchasing car insurance that meets the minimum requirements set by the Government of Alberta.
Learn more about new car insurance grace periods in Alberta
Still have questions about insurance grace periods in Alberta? Contact BrokerLink. We have been in business since 1991, which means we know the ins and outs of the auto insurance industry. Not only can we answer your car insurance questions but we can also help you find a comprehensive policy at an affordable rate. BrokerLink makes shopping for car insurance easier than ever before. Our expert brokers are available to shop around on your behalf, compare quotes, and unlock discounts to get you the best coverage.
What are you waiting for? Get started today by contacting BrokerLink. We can be reached by phone, email, or in person at any one of our Canadian locations. You can also use our online quote tool to receive a free car insurance quote in Alberta.