How Long Can I Drive a Car Without Insurance
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| Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo... Full Bio → | Reviewed by Joel Ohman |
UPDATED: Jan 22, 2021
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Here's what you need to know...
- Driving your new car without insurance is illegal, and you must have coverage in place when you purchase a car
- The actual limits and types of coverage that are required vary from state to state
- If the vehicle is being financed, your car insurance policy will have to include physical damage coverage to satisfy your obligations as a borrower
Assuming there is automatic insurance coverage on your new car can land you in hot water with not only the state but also with your lender.
While it might seem reasonable in the eye of the buyer that there would be a grace period that provides automatic coverage when a new car is purchased, this isn't how the industry works.
How long can you drive without insurance after buying a car? The answer is simply that you can't.
Instead of taking a risk and assuming there is free automatic coverage, buyers need to verify the terms of their contract or plan to buy a policy before they drive off the lot.
Enter your ZIP to start comparing car insurance when buying a used car or a new car by using our FREE tool above.
Car Owners Must Fulfill State Auto Insurance Requirements
State officials are responsible for setting car insurance requirements such as those listed by AAA.com. This is the main reason why the limits that you are required to carry will change as you cross state lines.
When you ask "Can I drive my new car off the lot without insurance?", remember, as soon as you buy a car, you are considered the legal owner and the party responsible for insuring the motor vehicle in the eyes of the state.
If you sign on the dotted line and then get into an accident 5 minutes later, it is you who will be seen as liable to pay for third-party repairs. This is why it is critical that you verify that you do have active coverage that will pay for liability claims before you even rev your engine.
If you have a loss with no insurance or insurance that doesn't extend when you are at fault in an accident, you can be left footing a very high bill. The Insurance Information Institute defines the various no-fault laws if you are in a no-fault state.
Does existing coverage extend to newly purchased cars?
Auto insurance policies include a long list of definitions that will extend coverage to more than just the 'covered auto' that is listed on the declarations page.
One of the definitions of a covered auto is a newly acquired private passenger vehicle, pickup, or lightweight van.
The additional vehicles will receive the broadest level of coverage on the existing policy for up to 14 days under the most recent Personal Auto Policy form. During that time frame, you will need to contact your insurer and add the vehicle to the policy before the 14 days is up or the coverage will cease and there will be a lapse.
If you need full coverage and your policy doesn't provide it, you will have automatic collision coverage for 4 days when you get insurance for a new car.
Let's look at the cost of full, or high, coverage car insurance to give you an idea of the cost of coverage on a new car.
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Many companies offer help when purchasing a car, such as the USAA new car insurance grace period, the Allstate new car grace period, or the Farmers insurance new car grace period.
The length and availability of the grace period will depend on the company.
Does existing coverage extend to a vehicle replacing the covered auto?
If you are not keeping your listed vehicle and you are replacing it with a new car, different rules apply to how long you are provided with interim coverage.
Replacement cars will receive the same level of coverage that is provided on the car it's replacing.
So, how long do you have to transfer insurance to a new car?
You will have interim coverage for 30 days on the replacement car, but make sure that you have the right level of protection or you'll need to add it immediately. Check with your insurance agent about adding new car to your insurance policy.
Will a dealership let you leave without insurance?
Can I drive a car home I just bought without insurance? No, the state and lender requirements will not let you just drive home a car without insurance.
Not only does the state require you to carry liability coverage and possibly personal injury protection, if you are leasing or financing the car you also have to comply with the lender's rules.
Physical damage coverage must be activated as soon as the loan is and cannot be removed until the loan is paid off.
The lessor rules protect their interests until they no longer own the vehicle in question. Because of this, you must purchase both comprehensive and collision coverage that pays to repair or replace the vehicle.
This video explains the different coverages available to you.
Failing to buy full coverage insurance before driving off the lot could violate the terms of your contract or lead to expensive forced-placed insurance which offers you as the borrower no real financial protection.
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Penalties for Driving Uninsured
Since just about every state has a car insurance requirement, the penalties for ignoring those laws can be severe. You would have to pay out of pocket for any damages from an at-fault accident, in addition to any fines or other punishments.
What can happen if you drive without insurance?
There are consequences for driving a car without coverage. It's possible that you can have an uninsured loss where you'll have to pay for your own repair bills.
It's possible you could be taken to court where your wages could be garnished to pay for other damages.
Here are some other penalties to be aware of:
- Traffic infraction and fine
- Misdemeanor conviction
- Fees through the DMV
- License and registration suspension
- SR-22 filing requirements
- Forced-placed insurance
- Loss of a new auto loan
- High-risk auto insurance rates
If you're looking to find the most affordable auto insurance rates, one of the easiest ways to go about doing this is to use an online rate comparison tool.
This will help you assess rates through several insurers at one time so that you can find a company that wants your business. Find out deadlines, arrange your insurance, and avoid any future issues.
Since you must have insurance in place before purchasing a car, you can start comparing car insurance rates now by using our FREE tool below!
Frequently Asked Questions: Driving Without Car Insurance
Below are some other commonly asked questions about driving a car without insurance.
How long do you have to get insurance on a new car in Alabama?
Alabama requires insurance coverage, like most other states. The coverage must be in effect when you first drive your new vehicle. The dealer you buy from will want proof that you have insurance before you drive the car off the lot.
Do I need insurance before I buy a used car?
Yes, the insurance requirements are the same whether buying old or new or from a dealer or private individual. You need to contact your agent to make sure any car purchased is covered under your policy.
Does State Farm transfer insurance to a new car?
Yes, providing your current coverage is sufficient, the only thing you would need to do is contact State Farm with your new vehicle information. They can then remove the old vehicle and add the new one.
How Long Can I Drive a Car Without Insurance
Source: https://www.carinsurancecomparison.com/how-long-can-you-drive-your-car-without-insurance/
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