If you are planning to buy a new car, you won’t be able to legally drive your new car until you buy car insurance. 48 states in United States require you to have car insurance. In these states it is compulsory to provide insurance documents at the time of registration of new car. Car insurance for new cars is a financial product that protects your car and you against damages.

In all these states law requires drivers to compulsorily have a liability insurance coverage because it ensures that if the driver causes an accident, he has the resources to cover the damage. Car insurance also reimburses you if you have coverage for damage to or the loss of your own car. Thus it minimizes the impact of a damaging event and for this reason, you’ll want to make sure you have car insurance whenever you buy a new car. If you already have car insurance for other cars you own, you’ll be able to add your new car to the policy. But if this is your first car, you’ll have to purchase a new policy.

When buying car insurance for a new car it is best to shop around and get enough coverage to fit your needs. To make the process quick and easy, choose Axissure which will help you select the best car insurance by showing you rates from several different insurance companies at one place.

Read on to know more about following aspects of buying car insurance for a new car:

• Shopping for new-car insurance
• Coverage for your new car when you already have car insurance
• Coverage for your new car when you’re buying car insurance for the first time

Car insurance is a contract where the insurer agrees to provide financial coverage for certain types of events covered in the policy. Therefore it’s important to know how much coverage you need. Factors that help you decide your coverage are minimum insurance requirement in your state, your budget and how much financial risk you are ready to take. In order to get the protection you need make sure you have the right coverage. Based on coverage there are following types of car insurance, and your initial quote will depend on these components of car insurance.

• Liability insurance protects you when you cause an accident and injure a person, you are liable for damage to his or her property as well as medical expenses. Liability insurance covers these expenses. It is the most basic and minimum coverage that is required by almost every state.
• Personal injury protection (PIP) covers medical expenses when you when you or a passenger in your car is injured no matter whose fault it is. Therefore it is also called “no fault” coverage.
• Comprehensive insurance covers the damage to your car from something other than an accident or driving related. Damages may be caused by theft, some weather situations or vandalism or due to some animals etc. It does not cover medical bills.
• Collision insurance covers the repair expenses when your car is damaged in a collision. Mostly required for new cars.
• Gap insurance covers your expenses when your new car is stolen or completely destroyed but due to depreciation there’s a gap between how much you owe and how much the car is worth.
• Full Coverage is a group of many types of car insurance policies taken together to cover damage from different situations. You put it together yourself as per the amount of coverage you need.

When you’re shopping around for car insurance, look at the bigger picture and consider overall cost of car insurance for new car. The more coverage you need, the higher your premium will be. While choosing your coverage, consider financial liabilities like lawsuits or replacing a whole car, both of which can cost you tens of thousands of dollars without enough insurance. Let us understand what constitutes the actual cost of your insurance

• Deductible, the amount you have to cover out of pocket on any claim before the insurer shares the rest of the cost, also influences your premium rates. Choosing a higher deductible will result in lower premiums for you because they reduce the financial obligation of the insurer.
• Driving history, your driving history including traffic violations, decides how risky it is to insure your vehicle. You may even get discounts for being a safe driver.
• Demographics, your age, gender, and location, will be used to determine your final premium. For example teenage males fall into the most risky category.
• Value of the car, an expensive car will have a high premium.

n the car insurance policy, your insurer will need following info:

• Make, model, and year of the vehicle
• Your driver’s license number
• Vehicle Identification Number (VIN)

You can easily add your new car to an already existing car insurance policy for your other car. New cars may be more expensive to insure than used cars because you’re insuring its undepreciated value. Adding the new car to your existing policy will increase your premiums, You can drive away with a new car even if you haven’t yet added it to your auto insurance policy because many car insurance policies have a provision for new-car insurance that grants you a grace period between the time you buy the car and the time you add the new car to the policy. Instead, during that time, whatever coverage you have for your other car applies to your new car. If you have multiple cars, the strongest coverage may apply.

Depending on the insurer, as well as state and local laws, that grace period may vary from 24 hours to one month. If your car insurance policy doesn’t have this provision for new cars, you won’t be able to drive the new car off the lot.

You may have to modify your coverage if your current car insurance policy doesn’t include coverage in all the components. For example, if you leased your new car or paid for it with an auto loan, the leaseholder or lien holder will require you to purchase comprehensive and collision insurance to protect their asset. In some cases, you’ll be required to purchase gap insurance as well.

Although there will be a premium hike while adding the new car to your existing policy, but if the car is your second car you’ll qualify for a multiple-vehicle discount provided your insurance company offers one. Additionally, adding a new car is a great opportunity to review the coverage you already have. For example, you may qualify for a better rate for your improved credit score.

If you are buying car insurance for a new car for the first time, it would be best to take help from family and get added to an existing car insurance policy of any family member because getting insurance for the very first time is intimidating as well as expensive. But if you want to do it all by yourself you’ll need to shop around for car insurance and purchase a policy before you show up at the dealership. Getting your car insurance quotes before finalizing the car can help you make a decision about what kind of car you can afford. For example, a high-end car might be prohibitively expensive to insure. Once you know what kind of car you want, purchase your car insurance for new car and bring it with you to the dealership along with your driver’s license. The insurer may also fax or email a copy of the policy or some other form of proof to the dealer.

• Reduced coverage for old cars – Collision coverage is eliminated in case of old cars
• Get discounts for advanced safety features in new cars - Safety and security features could get you a premium discount.
• Use one insurance company – Group all your insurance policies at one company to get good discounts depending on the terms offered by your insurer.
• Drive carefully - Keep in mind that if you’re a new driver, you’ll pay higher rates because you’re considered inexperienced but if you drive carefully and maintain your car well you may reduce the cost of car insurance for a new car after some time.

Policygenius’ editorial content is intended for informational purposes and should not be considered legal or financial advice. To learn what financial products are right for you consult a professional.