If you’re buying your first car or even just buying a new car, you might be wondering whether it’s necessary to get car insurance before you buy the car or if you can get it after. We answer those questions and more below.
Car insurance defined
Let’s begin by explaining what car insurance is. Car insurance is a type of insurance designed to protect drivers from losses that occur on the road financially. Whether their car is stolen or they get into an accident, having car insurance can help. Not only is car insurance important in Canada, it’s the law. This means that you cannot legally drive a car anywhere in the country unless you have a valid car insurance plan. A valid car insurance plan complies with the local laws where you live. For example, in Ontario, the government has mandated that all drivers must purchase auto insurance policies that contain the following four coverages:
However, if you want extra coverage that will protect you against theft, damage from non-collision-related incidents, at-fault collisions, and more, you will need to add other insurance to your policy. A few optional types of auto insurance that are popular include:
When do I get car insurance?
Now that you understand a little bit more about what car insurance includes and that it’s mandatory throughout Canada, you must wonder, what’s the ideal time to purchase car insurance? Generally speaking, it is best to get car insurance before you get your new vehicle. This way, you can rest easy knowing that you are protected from the second you drive off the lot. That said, some insurance companies give drivers a short grace period after buying a new car to get it covered. For instance, you can find out more about the grace period in Alberta here.
It is worth noting that you may not have to purchase a new policy if you already have an auto insurance plan for another vehicle. Instead, you might be able to ask your insurance provider to switch the coverage from your old car to your new one - assuming you are swapping cars. Alternatively, if you are simply purchasing an additional car, it might still be worth contacting your provider to see about adding a second car to your policy. Multi-car insurance policies often result in discounts and may be more convenient than purchasing two entirely separate plans from different providers.
It is generally recommended to get car insurance before you pick up your new vehicle. That said, this is usually just a suggestion. It is not mandatory since most provinces have grace periods. However, getting car insurance before the grace period expires is mandatory.
In addition, if you are buying a car with a loan, then your lender may require you to show proof of insurance before you take your new car home. In this case, you have no choice but to buy your insurance policy before driving your new vehicle off the lot.
It is usually best to buy car insurance before you get your new vehicle. If you already have car insurance for another vehicle, you may not yet have to buy another plan. Most insurance companies offer a short grace period in which your new car is covered. Depending on the dealership and if you are buying your new car with a loan, you may have to have proof of insurance before taking your new car home. Private sellers do not usually request proof of insurance like lenders will, but you should still take care to get car insurance when buying a used car from a private seller.
Proof of insurance for a new car
Many car dealerships and lenders require customers to show proof of insurance before they can drive off with their newly purchased car. Thankfully, obtaining proof of insurance is relatively simple. Assuming you already purchased your car insurance plan through a broker or agent, you will have a physical pink slip or digital copy of your insurance policy that you can show as proof of insurance. Nowadays, you can likely find this by logging into your account online and downloading a copy. But if you’re having trouble, you can always call your insurance broker or agent or visit their office in person.
What is a grace period, and how do I know if I have one?
A grace period may apply if you have an existing car insurance policy for another vehicle. A grace period works because it may cover your new car for a set period of time after purchase before you’ve had a chance to update your coverage. Please note that if your insurer offers a grace period, the level of coverage you had on your previous vehicle will apply. If you are buying a brand-new vehicle or a more expensive vehicle, then your previous coverage may not be adequate, especially if you only purchased the minimum coverage requirements, e.g. $200,000 in third-party liability car insurance.
In addition, not all policies come with grace periods, so you will need to read through yours carefully or have a broker do it for you to determine if a grace period applies to you. If it does, make sure that you take note of the length. Grace periods can vary between seven days and 30 days.
How to update your auto insurance policy when buying a new car
If you already have a car insurance plan, whether it’s young driver's insurance or standard auto insurance, you might be able to update your current policy rather than purchasing a brand-new one. This is usually the easiest way of insuring a new car. Just call your insurance broker or agent to make sure that this is an option for you. It is also worth noting that because the make and model of the car you drive have the ability to impact your rates, updating your car could affect your insurance premium.
Once you have confirmed with your insurer that you can, in fact, update your current auto insurance plan to cover your new car, be prepared to provide the following information:
If you do not have a current car insurance plan or you wish to purchase a different plan for your new car with another provider, then on top of your vehicle identification number and the purchase price of the car, you will also need to provide:
- Your legal name
- Your birthdate
- Your home address
- Your driving record
- Your driver’s licence number
With the information listed above, your insurance provider will calculate your premium. They will assess your risk using the aforementioned factors and develop an appropriate premium based on your risk level. To receive a free insurance quote from a broker at BrokerLink, reach out to us today.
How to buy car insurance before getting a car
Buying car insurance is easier than you think, especially when you have a BrokerLink insurance advisor by your side. All BrokerLink insurance advisors are fully licensed and have years of experience helping customers just like you. Keep reading to give you an idea of what to expect when buying car insurance for a new car:
Decide what car you want to buy
Before you can register your car and purchase car insurance, you must first decide what car you want to buy. This is because the make, model, and year of the car you buy will all impact how much you pay for car insurance, so you can’t buy insurance before you’ve settled on a vehicle.
Collect information about your vehicle
The next step is to start gathering the information you will need for your car insurance policy. This will include your vehicle identification number, the car's mileage, and the vehicle's make and model.
Submit the information you have collected
It’s time to submit the information you collected about your car to your insurance provider at the last step. If you are getting insurance from a new provider, you must provide personal information, like your name, home address, age, a copy of your driver’s licence, and your driving record.
Pay for your policy
Once you have submitted the necessary information, an insurance agent will review it and calculate your premium. If you wish to proceed with purchasing insurance from this provider, you will sign the contract, pick a payment plan, and start paying for your insurance coverage. Customers often can choose between a monthly payment plan and a yearly one.
How long does it take to buy car insurance?
You might be surprised to learn that the car insurance-buying process is relatively quick. In fact, in most cases, you can purchase an auto insurance plan on the same day. It might even take as little as 30 minutes if you have collected the necessary information or are updating an existing policy. We strongly urge customers to shop around before settling on a particular policy.
This is the only way to ensure that you get the best coverage at the most competitive rate. If you need help with this, don’t hesitate to contact BrokerLink. It is the job of our insurance advisors to shop around and compare rates on behalf of our customers.
Get in touch with BrokerLink to learn more about getting insurance when buying a car
Buying insurance can seem daunting, especially if you aren’t sure when to buy it. Luckily, BrokerLink can help with every aspect of the insurance-buying process. First, we can explain when the best time to purchase your new policy is. To ensure you are protected, we highly recommend buying coverage after you have purchased your new car but before you’ve driven it off the lot. This way, you will be protected from the moment you get behind the wheel of your new car.
When deciding what car insurance plan to buy, BrokerLink can lay out your options. If you already have a policy for another car, you might be able to simply update your existing policy or add a second car to your policy. This is often the most convenient option. However, you may also wish to purchase a brand-new policy, which a BrokerLink insurance advisor can also help with. One of our auto insurance experts will assess your new vehicle and your driving habits to recommend the right coverage for your needs. Get in touch today to get started and receive a free car insurance quote.
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