The amount of coverage you need depends on your risk tolerance. You could just get the minimum amount of mandatory insurance in your province. However, if you do, you are likely not going to be getting collision coverage or comprehensive insurance coverage. Although this does somewhat depend on where you are living, generally, it is riskier to just get the mandatory coverage. The more coverage you add to your new vehicle, the more you will pay in monthly premiums. However, this could be worth it as your vehicle is going to cost a lot of money to fix if an accident occurs.

Am I Covered Driving A New Vehicle Off Of The Lot?

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You might not have coverage for driving a new vehicle off of a dealership lot. Once you purchase the vehicle from the dealership, it is no longer covered under the dealership’s insurance policy. Most dealerships require you to purchase and prove you have insurance first. Your best bet is to get into contact with your insurance company. It is not worth getting caught driving when you aren’t insured. Generally, you should be able to set up an insurance policy for a new vehicle and have a dealership verify it within a few days time. It shouldn’t take long before you can drive that new car off of the lot.

Can I Transfer My License Plate To Transfer My Coverage?

Transferring your license plate does not change your insurance coverage. The old license plate must only be used on your old vehicle. That is unless you have the plates transferred at your local registry office. If you do this, then sure, you can transfer your license plates. However, this does not transfer over your insurance coverage. You need to contact your insurance company to set up a new insurance policy. Only then will you have coverage for your new vehicle and be allowed to drive it with the old plates.

Can My Lender Force Me To Get A Certain Amount Of Coverage?

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You might be surprised, but yes your lender can force you to get coverage. If you happen to get into an accident and destroy your vehicle without collision coverage, you really would have no reason to pay back your lender. Sure, you would owe them the money, but they have nothing to take away from you to force you to pay them back. Due to this reason, your lender is more than capable of forcing you to get a certain amount of coverage. Should you refuse to pay for the extra coverage that they want, they could deny you the loan to buy your vehicle.

How Much Does Coverage For A New Vehicle Cost?

Coverage for a new vehicle is much more than that of a used vehicle. When a vehicle is in its first few years, it is worth the most money. The newer a vehicle is, the more you are going to have to pay for coverage. The actual model of a vehicle also plays a huge role in the overall cost of your insurance premium. Whether or not you have gap insurance or not can also add a ton of money onto your insurance policy. Gap insurance covers the difference between the value of your vehicle and your car insurance loan. If you are in the first few years of owning a vehicle, your premiums can be substantially more than your loan for these reasons. The best way to figure out your exact cost for coverage is to go and get an insurance quote.

How Much Will My Insurance Premiums Go Up If I Have To Make A Claim?

It is very hard to say how much your premiums will rise if you need to make a claim. However, if you are claiming a new vehicle, this is a large expense for your insurance company. The more your insurance company has to pay out for a claim, the more you can expect your future insurance rates to cost you. In a study done in the United States, they found that insurance rates increased an average of 41 percent after making one car insurance claim. To put this in perspective, if you had a $200 per month policy, you will pay $282 a month after making one claim. Although this was not Canada, this is a good representation of how your insurance rates can be impacted.

How Much Liability Should I Have For A New Vehicle?

Just because you have a new vehicle, doesn’t mean you need more liability. Liability has nothing to do with the value of your vehicle. Liability will simply cover you in the event an injury occurs in an accident. A new vehicle is not going to cause a more serious injury just because it is new. For this reason, you should be safe to stick with the old amount of liability coverage that you had on your auto insurance policy, as long as you are comfortable with it.

How High Of An Insurance Deductible Should I Have For A New Vehicle?

new vehicle

The size of your deductible for a new vehicle can impact your insurance rates. However, since you just bought a new vehicle, you might not want to have a large deductible. Due to the financial strain of just buying a vehicle, you are likely not going to want to take the hit of a large deductible payment should you crash. However, it really depends on what your financial situation is like. Whatever you do, just make sure that you can afford a deductible on a new vehicle as new vehicles are worth a lot of money and it would be a shame to not be able to afford to repair it if an accident occurs.

To Conclude

The amount of insurance coverage you get is partially how much risk tolerance you have. The less coverage you have, the higher the risk you have. However, the higher the risk you have, the lower the risk is for your insurance company, which lowers your premium. You will have to try and determine where the best balance is for your situation. Make sure you think about your current financial situation as well as how your situation might be in the future.

Resources:

https://www.cbsnews.com/news/heres-how-much-your-rates-could-rise-after-an-accident/
https://www.cooperators.ca/en/Answer-Centre/Newsletters/Coverage-for-new-cars.aspx