How to Transfer Your Auto Insurance When Buying a New Car

Buying a new car is always an exciting milestone, but it also comes with important paperwork and decisions, including your auto insurance. Whether you're trading in your old vehicle, buying a second one, or switching from a lease to ownership, it's essential to understand how to transfer your auto insurance properly. A smooth transition ensures continuous coverage and helps you avoid legal issues or gaps in protection.

In Canada, auto insurance is legally required for all vehicles on the road. When you buy a new car, your current insurance policy doesn't automatically apply unless it meets specific conditions. Most insurers offer a grace period, usually 7 to 14 days, to give you time to notify them of the new vehicle. However, this grace period typically only applies if:

• You're replacing a car currently listed on your policy
• You contact your insurance provider within the specified time frame

Failing to update your insurer with the new vehicle details could result in denied claims or even driving uninsured, which comes with steep fines and penalties.

Please note: This blog provides a general overview of updating your home insurance policy. It is not all-encompassing and should not be taken as specific advice. Be sure to discuss your unique circumstances with a licenced insurance broker to receive guidance tailored to your situation.

What Details Your Broker Will Need When Updating Your Auto Insurance

To update or transfer your auto insurance, you’ll need to provide your broker with:

• Vehicle Identification Number (VIN)
• Make, model, and year of the new vehicle
• Purchase date
• Proof of ownership or bill of sale
• Odometer reading

This information allows your insurance provider to assess the new car's value, risk profile, and applicable coverage.

Does Your Premium Change When Buying a New Car?

Yes, your premium may change based on the type of car you're insuring. Factors that affect the cost include:

• Vehicle type: Luxury cars or performance vehicles often cost more to insure
• Safety features: Cars with modern safety systems may qualify for discounts
• Repair costs: Expensive or imported cars can lead to higher premiums
• Theft rating: Some models are more prone to theft and cost more to insure
• Usage: How far and how often you drive the car

Pro Tip: Use this opportunity to ask your broker for quotes on a few similar vehicles before you buy. It may influence your decision.

Can You Transfer Your Policy to a New Vehicle?

Yes. If you are simply replacing your current car, your broker can transfer your policy to the new vehicle. You may still need to:

• Update your coverage limits
• Add collision or comprehensive coverage if the new car is financed
• Adjust deductibles based on the car's value

This is also a good time to reassess your coverage needs. A new vehicle may require more protection than your previous car.

One common mistake many drivers make when buying a new car is cancelling their current insurance policy before the new one is officially in place. Doing so can create a gap in coverage, leaving you unprotected and potentially in violation of provincial insurance laws. To avoid this, always contact your broker before or immediately after purchasing the new vehicle to begin the transfer process. Your existing policy should be updated to reflect the new car’s details, and only once the new vehicle is fully insured and registered should you cancel coverage on your old car. This careful transition ensures you stay legally covered throughout the process and avoid any lapses that could affect future claims or driving privileges.

Use the Transition Time to Compare Quotes

Buying a new car gives you a natural opportunity to shop around. Rates can vary significantly between insurers based on how they classify your new vehicle.

Take this time to:

• Compare premiums from multiple providers
• Evaluate discounts for bundling home and auto insurance
• Review your deductible options
• Explore optional coverages like accident forgiveness or roadside assistance

Double-Check Your Registration Details

When switching cars, it's easy to focus on the insurance and forget that your vehicle registration must be updated as well. Make sure the details on your registration match those on your insurance policy, especially the VIN and address. Discrepancies between registration and insurance records can lead to claim delays or denials, so double-check everything for consistency. Your broker can assist with guidance if you’re unsure how to align these details correctly.

If you're adding another vehicle to your household rather than replacing one, you’ll need to either add the new vehicle to your existing policy or set up a multi-vehicle policy, which may qualify you for a discount. Be sure to inform your insurer which driver will primarily operate each vehicle, as this impacts how your policy is structured.

Additionally, if your new car is financed or leased, your lender will likely require proof of comprehensive and collision coverage. If you’ve traded in or sold your old vehicle, ensure it’s promptly removed from your policy, and cancel its insurance once the ownership transfer is complete. Always keep a copy of your insurance pink slip for the new car in your glove compartment.

How BIG Insurance Can Help Transfer Auto Insurance

At BIG Insurance, our experienced brokers are here to make the transition seamless and straightforward. Whether you're replacing a vehicle, adding a new one, or re-evaluating your entire policy, we can:

• Update your policy instantly
• Provide coverage options tailored to your new car
• Shop quotes across Canada’s leading insurers
• Ensure you meet legal and lender requirements

Buying a new car is a major purchase, and your insurance policy needs to reflect that. Don’t assume your old policy automatically applies. Always contact your broker with the vehicle details and confirm your coverage is up to date.

Ready to update your auto insurance? Reach out to a BIG Insurance broker today to get expert help and a no-obligation quote tailored to your new vehicle.