I have auto insurance and plan to purchase a new car. When do I have to notify my car insurance company?

Your current auto insurance policy will cover your new car temporarily, as long as you're buying the vehicle for personal, not business, use. However, you should notify your car insurance company as soon as possible about the purchase.

The time frame for when you must notify the insurer varies among car insurance companies. Some states also have laws setting a minimum amount of days for the grace period.

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In most instances, you'll have anywhere from two weeks to 30 days. Don't let this task slip through the cracks. If you fail to inform the insurer within the grace period, then you'll end up driving uninsured.

Keep in mind that the same amount and type of insurance coverage you had on your old car will transfer to the new car during the grace period. So if you carried only liability insurance on the old car, that's all the coverage you'll have on the new car until you talk to your insurer.

Liability insurance covers damage and injuries others suffer when you cause an accident; it does not pay for repairs to your vehicle. Collision and comprehensive coverage are optional according to state laws, but they're highly recommended for newer cars, and they may be required by your lender if you finance a new vehicle. Collision pays for repairs or replacement of your car when it's damaged in a traffic accident, and comprehensive covers losses from causes other than traffic accidents, such as theft, vandalism, natural disasters, fire and collisions with animals.

If you're still mulling what make and model of car to purchase, keep in mind that some cars are more expensive to insure than others. Talk to your insurance agent and get car insurance quotes for different types of vehicles to help with the purchasing decision.

For more, see Auto(matic) coverage for new cars.