Whether you're trading in or trading up for a new vehicle, you have to insure it in Illinois. Car dealerships will require you to have insurance for your new vehicle before you drive it off the lot. That doesn't mean you should rush out and buy a new insurance policy right away. If you already have auto insurance, you can use that policy to temporarily cover your new vehicle.
If you already have auto insurance, you can use that policy to temporarily cover your new vehicle.
Generally speaking, you have 30 days to get your new car registered and your title squared away, and auto insurers provide a window of time for you to inform them about your new vehicle. (An industry-wide rule is that as long as you're not buying a vehicle that's going to be used for business, you'll have coverage under your existing policy for at least 14 days to 30 days.) It's imperative that you tell your insurer about your new car as soon as possible. You could be driving without certain coverage's or without insurance entirely if you don't.
Most insurance policies provide coverage for "your car," which is generally defined as the vehicle that is specifically named on your auto policy, plus "a four-wheel private passenger car, a motor home, [and a four-wheel vehicle] not used for wholesale or retail delivery which you acquire during the policy period provided you tell [the insurance company] about it within 30 days after you acquire it."
"If you're replacing an existing vehicle, you'll generally have coverage until the end of the policy term," . The company will adjust the rates for your comprehensive and collision coverage's — also known as physical damage coverage's — from the date you purchase the vehicle. In other words, if your replacement vehicle is newer than your previous car, you'll be billed for the higher comprehensive and collision rates.
At Progressive Auto Insurance Co., on the other hand, policyholders will receive liability coverage for their new vehicles until the policy term is up. At that time, Progressive customers will have to buy coverage specific to their new car. Comprehensive and collision coverage's are extended for only 30 days after the new car is purchased. "If you want physical damage coverage's after the 30 days, you have to notify us," says Donna Marquard, a spokesperson for Progressive.
Marquard says that Progressive doesn't extend the physical damage coverage because a new car is typically worth more than the old vehicle that's insured on the current policy. Progressive wants the opportunity to adjust the comprehensive and collision coverage's accordingly, and that means a increase in your premium.
If you have uninsured/underinsured motorist coverage and medical payments coverage, they too will extend until the end of the policy term.
| Leasing companies' minimum insurance requirements |
| Leasing Company |
Liability requirements |
| Ford Red Carpet lease |
20/40/15
Collision and comprehensive coverage's with deductible no higher than $1,000 |
| Chrysler Gold Key lease |
100/300/50
Collision and comprehensive coverage's with deductible no higher than $750 and $500, respectively |
| American Honda Finance |
100/300/50
Collision and comprehensive coverage's with deductible no higher than $1,000 |
| GMAC |
100/300/50
Collision and comprehensive coverage's with deductible no higher than $500 |
| GE Capital |
100/300/50
Collision and comprehensive coverage's with deductible no higher than $1,000 | |
Although leasing is often an efficient way to secure transportation, it can create the extra step of buying all-new auto insurance. Lease contracts often require higher liability limits than the state's minimum liability requirements. For example, Chrysler's Gold Key, American Honda Finance, GMAC Auto Finance, and GE Capital — all leasing companies — require you to buy at least 100/300/50 in liability coverage. That's $100,000 in bodily injury coverage for one person, $300,000 in bodily injury coverage for all persons, and $50,000 in property damage coverage.
Considering that most states' minimum requirements are about one-quarter of what the leasing companies mandate, you're being required to spend significantly more money on your insurance in most states when you lease a car. And you'll probably have to carry the leasing company's minimum liability coverage's before you can drive your new car off the dealer's lot.
If you don't already have insurance and you're buying your first car, you're going to have to get an insurance policy before you can drive around town in your new auto. In Illinois where you are required to carry auto insurance, dealers need to see proof of insurance before they can let you drive off the lot.
If you're already insured and the dealer asks to see proof of insurance before you can drive away with your new car, show your current insurance card. You're covered. but only for the same coverage's that you currently have. If you're leasing a vehicle and need to upgrade your coverage, generally your insurer can get you the coverage you need within 24 hours.