If you’re thinking about buying a new car, you should also be thinking about insurance needs. In most cases, you may want to purchase an insurance plan before buying a new car to ensure that you have enough coverage.

How Soon After Buying a Car Do You Need Insurance?

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, however, you may have to have proof of insurance before taking your new car home.

If you are buying a vehicle from a private seller, they will not usually request proof of insurance before leaving with the new car. However, you must keep in mind that driving without insurance is illegal and could end up costing you a lot in legal fees and even more if you are in an accident .

Getting Proof of Insurance for a New Car

If you are buying a vehicle from a dealership, then you will need proof of insurance before they allow you to leave with the car. In some cases, you may be able to call an insurance representative to find coverage right from the dealership. Also, if you already have insurance on a different vehicle, you may be able to show proof of that insurance. This is usually a requirement whether you are buying a used or new vehicle. Additionally, even if you choose a lease, you will still need proof of insurance.

Most insurance companies will provide you with quotes pretty fast and in most cases, you can usually get new insurance in 24 hours or less.

What is the duration of the grace period in car insurance?

The grace period for car insurance renewal is typically from 15 to 30 days, depending on the terms and conditions mentioned in the policy. While you can renew the car insurance after the grace period, you may have to pay the penalty or late fee apart from losing benefits such as NCB.

Consequences of not renewing the insurance policy

As per The Motor Vehicles Act, 1988, driving a car on Indian roads without Third-party Insurance Policy is illegal. Here is what happens if your insurance policy expires.

• No cover and claim: No cover means you cannot raise any claims. In case of damages to your car, ACKO is not liable to compensate for the loss.
• Legal trouble: Driving your uninsured car will invite fines or penalties by the traffic police. A repeat offense will invite harsher penalties or even a jail term.
• Loss of NCB: The discount you earn for not raising claims during the period will automatically stand canceled if you do not renew it within 90 days from the expiry date.
• Scope for inspection: Since the policy has expired, your car may have to be inspected before ACKO can consider the policy for renewal.
• No third-party cover: In case of an accident where a third party is involved, you have to bear all the expenses.

Benefits of renewing car insurance within the grace period

Here are the advantages of renewing car insurance within the grace period.

• Get to keep the NCB: If you renew the plan within the due date of the grace period, you get to enjoy the NCB you have earned.
• Reduce any potential premium increase: By renewing the plan within the expiry date of the grace period, you get the benefit of avoiding an increase in the premium.
• The policy remains active:During the grace period, the policy continues to be active; however, you are not covered against damages to the car or third-party liabilities. While you cannot raise claims, you continue to enjoy the benefits of NCB for 90 days from the date of expiry..

How to Update Your Insurance When Buying a New Car?

If you currently have insurance and plan on staying with the same provider, then you will need to notify them that you are buying a new car. They will request certain information about your vehicle, including:

• Vehicle identification number (VIN)
• Purchase price

If you are buying new insurance with a new provider, then you will need to give additional information, which may include:

• Your name
• Your address
• Your driving record

Once you provide your insurance company with the details of the vehicle that you’re buying, they will calculate your rates. Your premium may increase or decrease based on the value of the new car, as well as the value of your previous vehicle. The good thing is that you don’t have to stay with your current provider. If they raise your rates too much, or you want to see what other companies have to offer, you can always switch providers.

All you need is the Vehicle Identification Number (VIN) of the vehicle and you can shop around for quotes, finding the best rates. If you do decide to go with a different provider, make sure you buy your policy before canceling your current one. Not only do you want to avoid driving uninsured, but new insurance companies may quote you higher if you have a gap in insurance coverage, as they will consider you to be a higher risk.

Shop Around and Find the Best Rates

If you’re in the market for a new insurance provider for a car you’re interested in buying, it is best to get quotes from a few different providers. You can either request quotes on your own or work with an independent agent who can provide you with multiple quotes from multiple providers. Here is some information you will need to get accurate insurance quotes:

• Full names of all drivers who will be on the policy
• Birth dates of all drivers on the policy
• VINs for not only your new vehicle but any other vehicles on the policy
• Social Security numbers of all drivers on the policy
• Your address
• A copy of the declarations page from your previous insurance company 

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.