It doesn’t matter if you’re a first-time driver or a seasoned pro: navigating the ins and outs of automobile insurance can be confusing. There are a lot of different rules and procedures to keep in mind.
For example, many would-be drivers find themselves having sudden doubts before putting money down on a new vehicle. Do you need insurance to buy a car? Most people in this situation aren’t certain. However, a lack of knowledge could end up wasting a lot of time and could even cause you to lose the car of your dreams.
How does insurance play into purchasing a new vehicle? Read on, and we’ll walk you through everything you need to know.
Do You Need Insurance to Buy A Car?
You’ve stepped onto the lot and found the perfect car for you. Both you and the salesperson are thrilled to lock things down and you feel like a million bucks. What could go wrong from here?
A lot, as it turns out, if you don’t have automobile insurance.
In order for someone to purchase an automobile, they MUST currently have the minimum insurance coverage as required by the state they reside in. For those in North Carolina, that means having a minimum of $30,000 of liability car insurance per person injured in an accident.
It also means having car insurance with $25,000 worth of liability for any property damage you might cause in your vehicle.
These are basic coverage minimums, and it’s actually recommended that you have an insurance policy with even greater coverage in order to prepare for accidents in which damages may be worse than the above.
Without this type of insurance in place, most car dealerships won’t allow you to drive a car off of the lot. They are aware of the laws regarding insurance and don’t want to be implicated if you take a car on the road while uninsured. The state government, after all, won’t even issue you a license plate without proper insurance in place.
There are some situations, such as a private sale, where you may succeed in purchasing a car without taking out insurance. The person selling the automobile might not care if you have insurance or not, or may fail to check. In this situation, you are still greatly at risk.
Driving an automobile without having insurance in place can lead to big fines, penalties, and even jail time in certain situations.
Why Do I Need Insurance?
North Carolina is a ‘fault’ state when it comes to financial responsibility for injuries and damage that result from an automobile accident.
That means that one driver in an accident will be found guilty for causing it. That driver will be personally responsible for compensating anyone who experienced harm as a result of the accident.
The North Carolina government understands that most people won’t have access to the funds needed to properly compensate others for these damages. Legally requiring automobile insurance is a way to ensure financial accountability on the roadways of the state.
With millions of accidents occurring each year, it’s important that there is a system of accountability in place.
A person who suffers a loss due to an accident can then file a claim with the at-fault driver’s insurance company, who will then need to pay for the damages sustained. This avoids a situation where an at-fault driver cannot pay for an accident they caused.
What If I’m Trading In a Car?
Things are a bit different if you’re trading in a new car for an old one. Generally speaking, the insurance policy you took out for your old car will be able to be carried over to a new one.
This will vary depending on the insurance carrier you’re currently working with. Most carriers allow a thirty-day window where your old insurance will cover the new vehicle. Within those thirty days, you’ll need to notify your insurance carrier of the new vehicle.
It’s best to actually notify the insurance carrier before you trade-in for the new vehicle. That way there will be no surprises when they let you know how much that vehicle might cost to insure.
What To Do When Purchasing A Vehicle
You’ve read the above and you’ve established a connection with an insurance company prior to going out to buy your new car. How do you involve the company with your new purchase? It’s really quite simple.
When you’ve found the car you want to buy, call your insurance company and provide the VIN number of the automobile that you’re interested in. Tell them what type of insurance you’re interested in for that car.
Many people take out comprehensive and collision coverage for a new car to protect their investment, but what you do is up to you.
The agent at your insurance company can then set up a policy to start on the day you intend to drive the car off the lot. This way, you’re insured and good to go with the law. You can drive on the roadways with no worry of getting into trouble.
Automobile Insurance In North Carolina
Do you need insurance to buy a car? It’s a question that many don’t know the answer to, even though the information can be vital.
You do have to have car insurance in North Carolina in order to legally drive a car on public roadways. In most cases, a seller will not allow you to purchase a car without proof of insurance in hand.
Need help finding the right insurance policy for you? Give us a call anytime and we’d be happy to help.