When Should I Insure?

When acquiring a new set of wheels, it is important to determine not only how to insure it, but when.

You shopped around, have taken the drive and determined you actually want a specific car. If your new car is to be financed, the finance institution will insist you take out insurance as a matter of course. Technically, a financed car belongs to the finance institution until it is fully paid off, only then does it really become yours, and it simply wants to insure its assets.

If you buy cash, the onus is on you to insure the car personally. It is important to do this before you take delivery of the car, because from the moment the keys are handed over from seller to buyer, the onus of responsibility for overall ownership, finance, insurance, fines and any legal liability falls on the new owner.

If one person sells a car on Day X but a week later on Day Y the new owner is involved in any kind of accident or incurs a huge speeding fine, the previous owner cannot be held liable for insurance repairs, paying the fine, or continued payment of finance instalments should the car not yet be registered in the name of the new owner.

That is why you should arrange for upfront insurance. Inform your insurer of the date and time you are collecting your new car, ask for confirmation that it is covered. An insurer will provide temporary insurance on a car even without its final registration number or you having paid the first premium, provided you submit other vehicle detail such as model, year and VIN. It will only make the insurance formal once you have registered the car in your name and obtained a new registration number. Insurers do this to alleviate the risk of you having a financial outlay should you be involved in an accident around the corner from where you picked up your new car.


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