Is my new car automatically covered by insurance?

You must buy an auto insurance policy each time you purchase a new car. Did you know the national average cost of auto insurance is $118.91/mo.

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Mathew B. Sims is Editor-in-Chief and has authored, edited, and contributed to several books. He has been working in the insurance industry ensuring content is accurate for consumers who are searching for the best policies and rates. He has also been featured on sites like UpJourney.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Apr 20, 2020

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Here's what you need to know...

  • Unfortunately, nobody is out there to simply manage your car insurance policy for you!
  • When you buy a new car, it’s your responsibility to verify that your  car has insurance coverage before you drive off the lot
  • If you don’t already have existing insurance, you must submit an application for insurance with the initial payment before you drive the vehicle home
  • If you already have a policy and you’re a named insured on that policy, new cars that you buy during the policy period will be covered under your policy’s newly acquired vehicle provision
  • When the new vehicle is replacing one of the vehicles that you have listed on the policy, your policy will automatically provide coverage for the new car even when you don’t notify the insurer
  • If the new vehicle isn’t replacing a car that’s already on the policy, you will only have automatic coverage for 14 to 30 days under the terms of your contract

Buying a new car can be a time-consuming task. You have to start your mission to find the perfect car by doing your research on the makes and models that you’re most interested in.

After you narrow down your search for your dream car, you need to visit a dealer, test the inventory, and start negotiating.

Shopping for a car on the weekend is convenient, but weekends can pose a challenge when it comes time to insure the car.

If your insurance agent isn’t available on the weekend, adding the new car to your policy can be difficult. Here’s how new cars are covered under existing auto insurance policies.

Don’t waste time while comparison shopping for your new car! Easily enter your ZIP code to find the best rates from several companies NOW!

More Than Just the Cars

 

If you take a look at your Personal Auto Policy, you will find all of the terms and conditions that you are agreeing to when you buy insurance coverage through a carrier.

One of the sections in the contract describes what the company considers a covered auto. Under this section, it clearly states that any vehicle listed on the declarations page of the policy is covered.

However, there are some cases when vehicles that aren’t listed may also have some or all of the broadest form of coverage that you carry.

Coverage can extend when you tow a trailer, rent a car, borrow a car, or buy a car. Here are the criteria that must be met to ensure coverage automatically extends:

  • You must take ownership of a newly acquired vehicle during the policy term and the car must be registered in your name for the broadest coverage to extend to the car
  • Trailers will have liability coverage when they are being towed if you own them and they weigh less than 2000 pounds
  • If you rent a vehicle as a temporary replacement, your liability and physical damage coverage will extend to the rented vehicle for up to thirty days
  • Borrowed or rented vehicles that are acting as temporary substitutes must be private passenger autos that weigh less than 10,000 pounds and aren’t used to deliver goods

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Enter your ZIP code below to view companies that have cheap auto insurance rates.

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Existing Insurance Must Be In Your Name

If you already have insurance on your vehicle, you probably have automatic coverage that will extend to any new private passenger car that you take possession of.

One of the conditions that people overlook when they are looking at this provision is that the policy must be owned by at least one of the car buyers.

If you’re buying a car in your name and you will be the registered owner, the automatic coverage must be provided under an existing policy that lists you as a named insured.

If you are only listed as a household driver, the coverage won’t extend to the new car unless one of the named insured drivers is buying the car with you.

Coverage Only Extends for a Limited Period of Time

 

You shouldn’t rely on automatic coverage to protect your new car for long. If you’re insured under the policy, the automatic coverage will only be valid for between fourteen and thirty days for additional vehicles.

If you don’t have full coverage on the policy, the company will give you full coverage for four days so that you have time to add it.

If the new car is replacing a vehicle that you are trading in, you’ll have coverage on the replacement for the rest of the term.

Even though the coverage doesn’t expire, failing to add the car could pose problems with the lender or the state if you can’t verify that you’ve added the car to the policy.

If you don’t have your own insurance or you’re not happy with your current rates, you should start to shop around for insurance before you shop for a car.

Comparing insurance rates is the best way to find the most affordable policy for a new car.

If you want to save time and money, enter your ZIP code into our FREE online rate comparison tool for instant quotes!

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