Do I Need Car Insurance Before Buying a Car?
Yes. You must have a valid car insurance policy before you can register a car in Ontario and if you want to start driving the vehicle.
You may negotiate or even sign the purchase agreement first, but your insurance coverage must begin before registration, delivery, or driving.
Once you know the VIN of your car and expected pickup time, contact the insurer or broker with the purchase date, and financing details. Get the effective start date of your policy in writing.
Buying a Car in Ontario
If you are financing or leasing your car, you might have to meet the lender’s or lessor’s insurance requirements. Those requirements usually include Collision and Comprehensive coverage, very specific deductibles and the lessor or lender will be mentioned on your policy.
For a private purchase, you have to coordinate the insurance, ownership transfer, permit, license plates, and any applicable safety requirements yourself. The seller’s insurance does not transfer to the buyer, just like the license plate.
The OAP 1 Newly Acquired Automobile Clause Is Conditional
A newly acquired automobile can be either a replacement or an additional vehicle.
A replacement vehicle receives the same coverage as the vehicle it replaces. An additional vehicle may be covered if the insurer covers all automobiles you own and the coverage involved in a claim applies to all your other cars.
Current policy language requires notice within 14 days after delivery and payment of any additional premium. It also includes conditions involving other vehicles you own and insure.
This provision is limited and may not provide the coverage that you, your lender or your lessor expect. Confirm with the insurer that the vehicle will be covered before driving it. The provision is not a general authorization to drive an uninsured vehicle.
Does My Existing Policy Automatically Cover an Additional Car?
Coverage applies only when the policy’s conditions for a newly acquired automobile have been satisfied.
Those requirements may differ between an additional vehicle and a replacement. The available protection may not be the same as it is for your current car. Tell the insurer about the purchase and get written confirmation before driving.