February is notoriously a very busy time for car dealers. New models are coming in and last year's models are going out. Car dealers are rightfully excited to sell you a car; however, in an attempt to give you the best service possible they may be providing you the wrong information that could end up costing you a lot in the end.
The most common mistake we see from car dealers is that they tell customers that they will take care of calling the insurance agent.
Doesn't that sound nice? One less thing you have to do.
Unfortunately, this is something that you and you only should handle. Why?
Because the dealerships don't always call!
This exact situation happened at the HPM Insurance office this week. A Milford client called to see why his premium did not go up because he recently bought a third car. When we told him that we did not see a third car on his policy, he replied that the car salesman said he was going to call us and take care of it for him. Our client assumed it was done because he had a loan on this car. When we called the dealer to get the information, his reply was, "oh- I was going to call you, but the bank didn't need proof of insurance."
The client was driving around without insurance on a brand new car for more than 30 days. If there had been an accident his NH car insurance policy would have denied the claim. The client would have been on the hook for the damage to his own car, any other car involved, as well as any possible bodily injury, loss of income, pain and suffering.... you get the picture.
Another big mistake is taking car insurance advice from a car dealer.
This statement is not to imply that the car dealer is not nice or smart; however, just because one sells a car does not mean that they are experts in everything involving the car.
This scenario also came to light at the HPM Insurance office this week, when a client called our office. She said she just happened to be driving by and thought to call us to add two new cars to her car insurance policy that she leased more than two weeks ago. When the HPM team member inquired why she had taken so long to call us her response was "the dealer told me that I had until my policy's renewal date to notify you." This is simply not true.
If there were an accident with either of the cars, there would not have been any coverage.
What you should do when buying a car:
If you are buying a car, call your insurance agent right away from the dealership. That way you have all the information right in front of you and know you are covered as soon as you leave the lot.
As most people do not wake up one morning and say unexpectedly that they are going to go and buy a new car today, call your insurance agent for advice before hand. If you know you are going to be at the dealership over the weekend, call your insurance agent and tell them this in advance. They can then note your file of your intentions. Insurance agents do have limited binding authority so speak with them first and they can tell you how your specific policy will respond to a new car and what you need to do once you own the car.
In short, your car insurance policy is a contract between you and the insurance company. It is ultimately your responsibility to call your insurance agent or company to make any changes. It is strongly advised that you don't trust anyone else to do it. There is just too much at risk.
For more useful information about buying a car and dealerships, please see our previous blog about buying gap insurance at the dealership vs. on your own car insurance policy.
Something to think about. Drive safe.