Contact: (217) 355 9075 - Address: 702 Bloomington Road. Suite 205. Champaign, IL 61822 - Email:

If you are like most people you will complete the paperwork to buy a new car after regular business hours or on the weekend. Times when your insurance agent's office is probably closed and you might be asking yourself when you get into that shiny new car...Am I insured to drive this car off of the lot? 

new car buying couple 2

The answer is... It Depends. 

Most insurance companies provide automatic coverage for new purchases equal to the broadest coverage you currently have on your insurance policy. 

For Example, if you have a car insurance policy in effect and you buy a new vehicle, that policy will automatically cover you for a short period of time (check with your agent, but usually between 4 and 14 days) This is built in protection in case you forget to notify your agent right away. 

Warning! If your policy only has liability coverage that is the only coverage your new car will have too. You will not have coverage to repair your car if you drive it off the lot.

If your policy has multiple cars, one with collision and comprehensive coverage and another with liability only coverage, the company will extend the greatest level of coverage to the new car during this temporary period. Meaning the new car would have matching coverage to the car with collision and comprehensive coverage.

Tip: You don't get Free insurance during this time. You must add the car to the policy effective the day you bought it. You just don't have to notify your agent the same day in some cases.

If you don't have a current insurance policy in place, you will need to arrange insurance before you drive the car off the lot.

Q: Will the Dealership insurance cover my new car?

A: No, the Dealership has a policy to cover their cars. Once you sign the paperwork it becomes your car and yours to insure

Q: Will the Dealership notify my insurance company when I buy a new car?

A: No, this is also your responsibility. Do not rely on the dealership to do this for you, even if they say they will take care of it. 

Q: What is Auto Loan Gap Insurance? Do I need it?

A: If you are financing your new car, Gap Insurance is probably a good idea. Learn more about Gap Insurance Here


If you are not 100% certain how your insurance company would handle a new car purchase or what kind of coverage you have on your current policy, contact your agent before you drive the new car home.

Rueck Insurance is located in and proud to serve the Champaign, Urbana area as well as all of Illinois. 



Question: If My Garage Burns Down, Will My Homeowners Insurance Cover the Damage to My Car?

burnt garage

Answer: Your homeowners policy specifically excludes motorized vehicles from your contents or personal property coverage. Though most companies do make exceptions for Lawn Mowers and Snow Blowers.

You would need to use your car insurance to set up a claim to repair your car if your policy has Comprehensive or Other than Collision Coverage included. If you only carry liability coverage on the vehicle you would not be compensated for your loss. 

The same answer would apply if your garaged collapsed and damaged your car(s).

Most companies would treat this at two separate losses and you would have two separate deductibles to pay. Some companies would treat this as one loss and you would only have one deductible (Usually the highest of your home or auto). Be sure to ask your agent if you would have one deductible or two in this hypothetical situation. 




Gap Insurance is one topic that has many Illinois Car Buyers confused. Should I buy it? Do I really need Gap Insurance for my new car purchase?

We will get to our answer later, but first lets talk about what Gap Insurance is and what it covers.

Gap Insurance can be defined as: 

"Gap insurance has one main goal: to pay off the balance of a loan or lease if the vehicle is totaled and the loan or lease balance exceeds the actual value of the car."

gap insurance vehicle

Now lets give an example of how Gap Insurance would work. 

You buy a brand spanking new car for $35,000 and make a small down payment and finance the rest. One year later you’re in an accident that wipes out your car. The insurance company writes a check for the current value of $28,000. Your loan balance is $32,000. The gap insurance will pay the $4,000 loan balance ($32,000 – $28,000).

Think this can’t happen? It does all too frequently. We’ve paid several claims where this exact situation occurred and our customer was so happy to have Gap Insurance. It may have been 9 months or 2 years down the road, but it has happened. And let me tell you, nothing is more painful than having to continue paying for a car you no longer have. And if you still owe money- you still must pay. Gap insurance makes this pain go away.

Sounds like a No-Brainer so far!

Risk of Financial Disaster

Car loans are changing. It is not uncommon for loans on new cars today to be 66, 72 or even 84 months. While the longer loans give you more time to pay and reduce your monthly payment, they also increase the risk of financial disaster if the car is totaled during the loan period.

A broad rule of thumb is that cars depreciate 25% in the first year, lose half their value after three years and are worth about two-thirds their purchase price at five years. But balances on longer loans don’t shrink as quickly, leaving drivers financially exposed.

A $27,000 car bought with no down payment would be well "under water" in the first year under almost any new-car loan, and in the red after three years on any loan longer than five years. On an 84-month loan, you’d owe more than the car is worth for 60 months.

That's why it is wise to find out more about Gap Insurance.

Because you took out a loan on your car the bank requires you to keep "Full Coverage" on the car. Meaning you must carry collision and comprehensive coverage to repair the car if it is in an accident in order to protect their investment in the car.

But No Insurance company on the planet will pay you more than the Actual Cash Value (ACV) of the car if it is stolen or totaled. How much you owe on your car loan is not a factor in determining the value of your vehicle.

The difference between what the insurance company offers and what you still owe on the car is the "Gap" you are trying to cover.

 Where Can You Buy Gap Insurance?

There are 4 basic ways for you to buy Gap Insurance.

  1. From the Dealership
  2. From Your Insurance Agent (If the car is NEW, It will not be available for previously titled vehicles)
  3. From stand alone Gap Insurance Providers like GapDirect
  4. Your Bank or Credit Union may offer Gap Insurance as part of their loan package.

How Much Does Gap Insurance Cost?

You need to compare Gap Insurance estimates before you finance your car. Most dealerships offer gap insurance but it may cost 50% more than what you might be able to get from your insurance agent says veteran credit insurance professional Scott Henderson of Corona Del Mar, Calif.

"Prices [for the same policy] can range from $300 to $700," he says. "It's one of many things that [a consumer] should educate themselves about before they go to the dealership. Many people have their first exposure to gap at the dealership."

You can buy gap coverage through many insurance companies, too. They often refer to it as loan/lease payoff coverage. Expect to pay 5% to 6% of the combined annual cost of your comprehensive and collision premiums. That is, if you pay $1,000 a year for comp and collision, you pay an additional $50 to $60 a year for gap coverage.

Know the differences in the Gap Insurance Options.

One important factor to consider is your ability to manage your Gap Insurance once you are no longer "Under-water" or Upside-Down" on your payments. Check the conditions under which you can drop the Gap Insurance and find out if you will be refunded any unused premium. Most policies from the dealership you will be forced to pay for it for the entirety of your loan, even after you no longer need it because it is factored into your monthly payments.

Another benefit of adding Gap Insurance to your car insurance policy is that you can drop the coverage at any time. So when you finally have that new car paid down enough that you no longer have a "gap" to be covered. You simply call your agent and ask them to remove the coverage.

The Final Answer: Adding Gap Insurance is just a smart financial decision.

I have seen many articles on the internet saying just the opposite, but those articles will not pay the difference between what you owe and what your car is worth. I have also seen several people who avoided financial disaster by having this overlooked coverage. Like any insurance policy, auto insurance is meant to protect you from a financial catastrophe. Adding gap insurance to your auto insurance policy is just one more way to accomplish this goal, at a very affordable cost.

You may prefer to buy your Gap insurance at the dealership and that is fine. Just make sure you properly protect yourself from Financial Disaster by purchasing Gap Insurance for your new car.

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Rueck Insurance is your independent, one-stop insurance center for all your personal and business insurance needs in Illinois. Insurance shopping is easy when the Protection Team provides you with multiple quotes to choose from. You will always know you are getting the best coverage at the lowest possible price.

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Rueck Insurance is your independent, one-stop insurance center for all your personal and business insurance needs in Illinois.

702 Bloomington Rd#205
    Champaign, Illnois
(217) 355-9075

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