Buying a new car can be an exciting event. Once you have those new car keys in your hand, you might only be thinking of all the places you want to go. But there are practical matters to consider first.
If you already have a good car insurance policy, you may be wondering whether you have to cancel it when you get a new car. Or can you just keep the exact same policy and keep on driving your new set of wheels?
Insurance companies in South Africa usually give you the option of keeping your current policy and transferring it to a new vehicle. But there are some conditions you need to be aware of.
Read on to learn more about how and when you can transfer insurance to another car, as well as some things to keep in mind during the process.
How to Switch Car Insurance to a New Car
Switching insurance to a new car is definitely doable. You don’t need to cancel your existing coverage and take out a new policy when you buy a new car.
Most insurance companies will let you switch the coverage you already have with them to another car. Simply call and inform them of your new purchase plans.
You will need to provide the insurance company with information about your new car. This includes the registration number, make and model of the car, and whether you are buying it brand-new or second-hand.
Payments Involved When Transferring Car Insurance
Unless you are buying the exact same type of car, be aware that your policy’s premium will likely change.
If you are buying a larger or more valuable car, the insurance company will charge you more. The basic policy that you have with them will remain the same, but your monthly payments could increase or decrease.
Some insurance companies may charge you an administration fee for making changes to your policy.
When is the Best Time to Transfer Insurance?
You should contact your insurance company as soon as possible to inform them that you wish to transfer your existing insurance to a new vehicle.
If your new car is involved in an accident and you haven’t yet updated your insurance policy, the insurance company will not pay for your damages. This is because the policy you have with them only covers the old car, not any vehicle you are driving.
Your best course of action is actually to contact your insurance company before buying a new car. That way, you can tell them about the vehicle you are considering and they can provide you with a quote for the new premium.
Avoid any unexpected payments and rather play it safe by getting insurance coverage before you drive anywhere in a new car.
Things to Keep in Mind When You Transfer Car Insurance
Remember to complete the process of registering your new vehicle before transferring your car insurance. Have this registration information at hand so that the insurance company can confirm they have the correct details for your new vehicle.
While you are transferring your insurance to a new car, it might also be a good idea to review the type of car insurance you currently have.
For example, maybe you only had third-party coverage for your previous vehicle, but you know you will be driving more frequently with your new car. You can then consider upgrading to comprehensive cover.
Once everything is finalised, ask the insurance company to send you a copy of the updated policy for your own records.
What Happens with Your Old Car?
If you traded in your old car at a dealership, it is no longer your responsibility. Just check with your insurance company after a few days to make sure that they took the old car off of your policy. You don’t want to accidentally receive a bill for two cars’ insurance.
On the other hand, if you decide to keep your old car, and transfer your insurance to the new one, just remember that it is no longer covered in case of an accident. If you plan to drive both cars, or hand your old one down to a family member, you should take out an insurance policy for each of them.
Ask your insurance company if they have a multi-car policy available. You can usually receive a discount for insuring more than one car under the same policy.
Know When Transferring Insurance is Not the Right Option
Even though transferring an existing policy to your new vehicle can save you time and effort, there are cases when this might not be the best option for you.
If you contact your current insurance company about a quote for the new vehicle’s premium and the price is much more than you can afford, it might be time to switch car insurance providers.
Compare the policies that other companies offer with what you currently have. It may be that when you originally chose your insurance company they were the best and most affordable around. But rates can change over the years and today there may be better options elsewhere.
Also look at the benefits that some companies offer. Maybe free roadside assistance or gap coverage is important enough for you to move to a new insurance provider.
Final Thoughts on Car Insurance Transfers
Transferring insurance from one car to another is usually a simple process. Most insurance companies will be happy to amend your current policy so that it provides the best possible coverage for your new vehicle.
It is a good idea to transfer your car insurance as soon as you can. Make sure that you inform your insurance company of your new purchase before you start driving.
Also have a look at other insurance companies and what they offer. Sometimes it can be better to move to a new company instead of amending your old car insurance policy.
Whatever you decide to do, don’t be hesitant to reach out to an insurance agent for help with the transfer process. You will feel much safer behind the wheel once your new car is insured.