When you buy a new car, you’ll need insurance before you can take it home. You might be asking yourself, "Do I need to cancel my current car insurance policy and start fresh, or can I just transfer it to my new vehicle?" Let's break it down and find out.
Can you transfer your insurance to a new car?
The good news is that yes, you can transfer your car insurance! When you’re buying a new car, just reach out to your current insurance company to let them know about your purchase and request an insurance policy transfer. Some insurers even offer online tools to update your policy easily.
However, it’s always a good idea to talk to your insurance broker, who can guide you through the process and suggest any extra auto insurance coverage you might want for your shiny new ride. And don’t forget to remove the insurance from your old vehicle once the new one is insured.
Is it better to transfer a policy or buy a new one?
It really just depends on your personal preferences, but there are benefits to just transferring your policy—the biggest one being convenience. It saves you time and might even save you money. Since you already have a relationship with your insurance provider, reaching out for an updated quote on your new car should be simple.
After that, if you're still on the fence about buying a new auto insurance policy, you can compare insurance rates by getting quotes from a few other companies (or let a broker, like those at BrokerLink, do the shopping for you). With the updated quote from your current insurance company and new quotes in hand, you’ll have everything you need to make the best decision.
If you choose to stick with your current insurance provider, just let them know you’d like to move forward with the quote and transfer your car insurance coverage to your new vehicle. This is typically the easiest option since you won’t need to apply for a whole new policy, meaning your new car will be insured quickly, so you can get out on the road faster.
Why you need to update your policy
When you buy a new car, you’ll need to update your insurance policy, whether you transfer your existing one or get a brand-new policy. This is because your car’s make, model, and year directly affect your insurance premium. So, if you switch vehicles, your insurance rate will likely change, too.
It’s also a good idea to use this time to update your coverage, especially if your new car is more valuable. For instance, if the car is brand new or an expensive model, you might want to consider optional car insurance add-ons like comprehensive coverage or collision coverage for extra peace of mind.
Can I also transfer my licence plate and registration?
When you get a new vehicle, you can either transfer your existing licence plate and vehicle registration from your old vehicle. If you’re trading in your previous vehicle, transferring your plate and registration is the more budget-friendly option.
The general rule with plates is that they stay with the person, not the car. So, as long as you're the one driving the new vehicle, you can easily transfer your plate.
You can use your existing licence plate and registration on your new vehicle for a certain number of days before you need to make the official switch. This is known as a grace period, and it can vary depending on the province in which you live. It gives you time to transfer everything over. Just remember, until the transfer is done, you’ll need to keep a proof of ownership document with you whenever you're driving.
Whatever you do, don't forget to transfer your insurance to your new vehicle
No matter how hectic things get when buying a new car, it’s important to make time to transfer your insurance. Letting your coverage lapse is a serious issue. If you don’t transfer your insurance to the new vehicle and end up driving it without coverage, you risk serious consequences, like getting fined and losing your licence for driving without insurance, since it's illegal in Canada.
Not only do you risk hefty fines, but you're also risking a significant insurance premium increase. If you let your auto insurance lapse, you lose your coverage, which means you cannot drive. As insurers view drivers with a lapse in coverage as higher-risk drivers, this means you'll see higher insurance premiums as a result.
On top of that, if you're labelled as a high-risk driver, you might find that your options for car insurance are limited since not all companies cover high-risk drivers. This can make shopping around for the best rates a bit more challenging. Basically, forgetting to transfer your insurance is just not worth the trouble, so make sure to get it sorted out!
Learn more about car insurance with BrokerLink
Do you have more questions about transferring your auto insurance to a new car? BrokerLink has you covered. Whether you need help shopping for a new policy, what types of coverage you should have, or just want answers about how to transfer your current one, we’re here to help with all your car insurance needs.
You can reach us by phone, email, or in person at any one of our locations throughout Canada. No matter how you choose to get in touch, a BrokerLink insurance advisor will be happy to assist you. We also encourage you to take advantage of our free online quote tool that can provide you with a competitive quote in minutes.
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