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Can I use an old insurance policy on a new car?


Question: I totaled my car. After my insurer paid me the value of the car, they said they’d cancel my policy for me since I was without a car.  I am buying a new car, but need insurance to get a loan.  Can I use my old insurance card and policy for my new car? 

Answer:  If your old policy were truly canceled out, then you’d be unable to use it for your new car. 

To have coverage on your new car, you need a valid car insurance policy in place; you cannot just use the old insurance card for the new vehicle if the policy it references is no longer in effect. 

You should contact your car insurance company and find out if the policy on your totaled vehicle has been canceled out or is still active.  If it’s active, then inform your insurance provider that you are buying a new car and see if the policy can be transferred to this car.

Typically, your current car insurance policy will cover a new car anywhere from a few days up to 30 days when it replaces another vehicle on the policy.  When your auto insurer allows this, the coverages for the new car will be the same as the one you are taking off. So, make sure the car insurance coverages meet the requirements of your lien holder, which normally means having collision and comprehensive coverages with certain deductible amounts.

If your policy is in effect and will transfer, make sure you remember to notify your insurer of the new car’s  vehicle identification number (VIN) and other vital information in the given time period so that the insurance company can place it on the policy and rate it properly.

If the policy on your totaled out car was canceled, then coverage ended on the cancellation date and you have nothing to transfer to a new car.  Instead, you’ll need to see about being issued a new policy for the new vehicle. 

You’ll need to apply and get a new auto policy before you go to pick up the car since you’ll want to be insured before you leave the lot.  In some states, the dealer must see proof of insurance before you are able to take possession of the vehicle and drive it away.

In the future, if you are without a car for a period of time, I’d advise you to see about changing your car insurance policy to a non-owner policy, instead of canceling it.  This way you wouldn’t have a lapse in coverage, which makes you a higher risk that some insurers won’t take on.  Then, once you get a new car, you can show continuous coverage on yourself and make the change back to an owner’s policy more affordable.

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