When you buy a new car, it’s like most major purchases. You sign a bunch of stuff you don’t really read, and you trust the person passing you the papers to explain things that might be important or relevant. Of course, insurance for your new car purchase qualifies as an important detail- so if it gets overlooked, people are often shocked to learn how that might happen.
How the dealership verifies your insurance with the NC DMV
There are some simple steps you can take to avoid that mistake if you understand where the disconnect is. Dealerships are required to have proof of insurance to insure the vehicle- however, they don’t actually have to provide the NC DMV with an ID card for the new purchase. All that’s required is to provide the name of the insurer and an active policy number. If they have that- the DMV assumes the new car will be added to the same policy. This information can be obtained from the ID card on any other car that you already own (including the one being traded in), so the dealership rarely gets an ID card on the new purchase for the file.
Confirming that coverage has been added for your new car
If the dealership is thorough (and many of them are), they will have a designated processor contact the agency or the insurer to notify them of the purchase and any potential trade. Most customers tell us the dealer implied or specifically told them they would handle that detail- but occasionally it just doesn’t get done. If it doesn’t happen as planned, the verification never gets uploaded to DMV by the insurance company, so the registration they gave you gets flagged as noncompliant and you get a letter threatening a fine. That’s usually when you make the call to your agent freaking out about driving around in a brand new car without insurance.
Don’t delegate insurance on your new car
When purchasing a new vehicle, I wouldn’t recommend depending on a dealership to call and add it for you. Always follow up with a call to your agent to confirm that the vehicle has been added.
In North Carolina, the current coverage you have on your auto insurance policy will extend to a newly purchased vehicle for up to 30 days from the date of purchase. However, if you have liability only coverage with no physical damage coverage, that is the only coverage that will extend, so it is important to get your new vehicle added right away to avoid not having a claim paid out on that vehicle or not having enough coverage.
As usual, be sure that you call and speak to an agent to make these changes and get the confirmation in writing. Leaving phone messages about your new purchase does not guarantee that the changes will be made to your policy. Inspect your auto insurance policy documents (change notices, renewal declarations pages) carefully. If you recently purchased a vehicle, and you do not see it listed on your policy, don’t assume the dealership has handled it. Call your agent right away to make sure it has been added.
