What Insurance Coverages Are Required for a New Car? 

Buying new car insurance can be a confusing process. There are many different types of coverage to choose from. Additionally, it’s vital to abide by state insurance laws to meet the minimum requirements. Before signing on the dotted line, it’s best to understand what you’re purchasing. Here is a quick guide to new car insurance that will help answer your questions about getting coverage for your new car! 

What Insurance Do You Need for a New Car? 

To drive a new car legally, you need at least your state’s minimum required auto insurance, which will cover injuries and property damage you may cause. However, if you finance or lease a vehicle, you will likely need more coverage. Read on for details. 

Minimum Insurance Required by State 

When you purchase a new car, most states require you to have an auto insurance plan in place before you can drive it off the lot. But what does that mean, exactly? 

This generally refers to liability insurance, which covers damages to other people or property if you are at fault in an accident. However, it is sometimes wise to increase the minimum to protect yourself financially in case of an accident, and according to the minimum insurance requirements in your state. 

What Coverage Is Required if Your Car Is Financed or Leased? 

If you lease a new vehicle or purchase one and have a loan, you will need to be sure your insurance extends to protect the vehicle in almost any situation, including weather, theft and accidents. 

Recommended Coverage for a Brand-New Car 

Buying a new car is exciting, but being adequately covered first is essential. Let’s break down what insurance is recommended for a brand-new car. 

Collision Insurance 

Collision coverage damages to your car in the event of a crash with another vehicle or object, regardless of who is at fault. If another driver causes the accident, their insurance will usually be used to cover your vehicle damage, however, if you cause the accident, your liability will not pay for your damages. If it is an accident where your vehicle is the only one involved, such as running off the road or hitting a stationary object like a tree, collision will pay for repairs, minus a deductible. If your car is totaled or stolen, this coverage pays up to actual value, which is usually determined using sources such as Kelley Blue Book for example. 

Comprehensive Insurance 

Comprehensive insurance covers damages to your car caused by an incident that’s not a collision, like vandalism or theft. For example, a sudden hailstorm happens when your vehicle is outside. Comprehensive is also what comes into play if you hit an animal and do major damage. This form of coverage also comes with a deductible and will pay up to actual cash value (ACV) if the car is totaled. ACV is usually determined with sources such as Kelley Blue Book. 

Uninsured/Underinsured Motorist Coverage 

This covers damages that you may experience in an accident with another driver who does not carry car insurance or who does not have enough insurance to cover your damages. In many states, this coverage is required, but not all. It can be structured to help pay for both medical costs and property damage in some states. This coverage is also used when you are involved in an accident with a hit-and-run driver. 

Gap Insurance 

Gap insurance helps cover the difference between what you owe on your car loan and the vehicle’s actual cash value if it’s totaled or stolen, preventing you from paying out of pocket on a loan balance. This type of coverage is mainly for brand new (or less than two years old) vehicles where the buyer used a minimum down payment. 

New Car Replacement Coverage 

New car replacement is a feature in that will replace your new car if it’s totaled in an accident or stolen within the first few years of ownership with a new vehicle of the same make and model – or as close as possible. 

Rental Reimbursement Coverage 

Rental car reimbursement helps pay for a temporary rental vehicle while your car is being repaired after a covered claim, so you can stay on the road without extra expense. 

How Much Insurance Do You Need for a New Car? 

You need enough insurance to pay for any damages you cause, as well as enough to pay to fix your own car in the event you cause an accident. If you finance your new vehicle, you will need to add collision and comprehensive to your baseline liability coverage. 

When buying car insurance for a new car, it’s important to consider a few key factors. One of the most important is the type of policy you want. There are several different varieties of car insurance policies, each with its own benefits and costs associated. 

Another thing to consider is how much coverage you’ll need based on the total value of your new vehicle. The more coverage you have, the more expensive your policy will be. 

Comparing new car insurance quotes from different insurers will ensure you get the best rate possible. Another factor that can affect your monthly premiums is the deductible you choose. 

If you opt for a higher deductible, you pay less for your monthly payments. But keep in mind that if you do get in an accident, you’ll need to pay the deductible amount out of pocket to cover the costs of repairs before your insurance starts to pay. You may need to review your savings to determine which is best for your situation – a higher or lower deductible. By weighing the pros and cons, you can make the best decision for your budget. 

What Documents Do You Need to Buy Insurance for a New Car? 

When you’re buying new car insurance, you’ll need to provide some documents to the insurance company. These documents can include your driver’s license and the information for your current car, including the make, model, and year. Be sure to have all of these documents ready when you start shopping for new car insurance. 

Get Coverage Before You Drive Off the Lot 

Have your chosen insurer in place before you drive off the lot with your new vehicle. A simple call from the dealership once you’ve settled on a new vehicle will be enough to get you the protection you need. Alternatively, some dealerships may offer to insure the vehicle: This typically costs more than purchasing a policy yourself. 

Setting things up before you leave the lot will also give you the ability to compare different rates and coverage options for new cars, which may allow you to save money on the purchase price in the long run. If this sounds overwhelming or if you want help shopping around for new car insurance, let us know. Our agents will work with you to help you create a custom plan — one that has all the coverage you need without any unnecessary headaches or cost surprises later on. 

Get a free, no-hassle quote from Acceptance Insurance today before buying new car insurance so that there aren’t any surprises when it comes time to pay your bill each month. Or you can just give us a call at 877-405-7102 or stop in a local office. 

FAQs About Insurance for a New Car 

It’s common for people to have questions about purchasing insurance for a new car. The questions below will provide you with the most frequently asked questions. If you have further questions, reach out to one of our agents for answers. 

What Is the Minimum Amount of Car Insurance Coverage I Need? 

The minimum amount of car insurance coverage you need depends on the state in which you live. In many states, the minimum amount of bodily injury liability coverage required is $25,000 per person and $50,000 per accident. 

Consult your local car insurance agent about the best coverage for your specific needs. 

What Should I Look for When Buying Car Insurance for a New Car? 

When buying car insurance for a new car, keep these factors in mind: 

• Your vehicle’s value: If your new car is worth a lot of money, you’ll need more comprehensive coverage than if it’s an older model. Certain cars are more expensive to insure than others.
• The age of your driver: Younger drivers might need more coverage than older drivers.
• The state you live in: Some states require more comprehensive coverage than others. 

At Acceptance Insurance, we believe that getting insurance should be easy and affordable. Get a free quote today. 

What Insurance Is Required to Drive a New Car Off the Lot? 

You must have at least your state’s minimum required auto insurance coverage before driving a new car off the lot. Most dealerships will verify proof of insurance, and if you’re financing, additional coverage may be required. 

Do You Need Gap Insurance for a New Car? 

Gap insurance isn’t legally required, but it’s often recommended for new cars. It helps cover the difference between what you owe on your loan and the car’s actual value if it’s totaled or stolen. 

Can You Drive a New Car Home Without Insurance? 

No, you cannot legally drive a new car home without insurance in most states. You need an active policy in place before leaving the dealership. 

How Soon Does Insurance Need to Start After Buying a Car? 

Insurance should begin immediately at the time of purchase. Many insurers allow you to add a new vehicle to your policy the same day to ensure continuous coverage. 

Does a Financed Car Require More Insurance Coverage? 

Yes, lenders typically require full coverage, including collision and comprehensive insurance, to protect their investment until the loan is paid off.