You just bought a shiny new motor and you can’t wait to take it for a spin; but make sure to check in with your insurer before you do. Auto insurance is mandatory in Ontario, and if you are found to be driving without adequate coverage you could be penalised. So how does insurance work when you get a new car, and will your old policy still be relevant?
Do I have to take out a new policy?
Technically just because you got a new car doesn’t mean you have to take out a new policy, but there are a few things that may change. Your insurer will allow you to transfer your existing coverage to your new vehicle, but it is vital that you are honest with your insurer about the make and model of the car. If you have bought a newer or more powerful car this may result in some amendments to your policy, and could change the type of coverage you require. Naturally you may see an additional increase in the rate of your premium due to the increased risk from the insurers point of view.
Is there a cost in transferring my car insurance?
For the most part the only fee incurred when you transfer your car insurance will be an administration charge, which should be listed in the terms and conditions of your insurance policy. Of course, if any features of your new vehicle affect your coverage, you may see your premium raise as a result.
How do I transfer my policy?
Switching your existing policy over to your new car is as simple as picking up the phone and giving your insurer a call. They should outline their terms and conditions and guide you in the right direction. If you are unhappy with the cost of your new premium you can search the market and see what other options are available to you. However, you may lose some loyalty discounts that your current insurer may have in place, and be forced to pay a cancelation fee which could outweigh any discounts a new insurer is offering.