I've been told that my auto insurance will cover any new car that either replaces or adds with my old one. Is it correct? What things should I consider in this regard?
Total Comments: 12
Posted: Tue Jun 15, 2010 07:29 am Post Subject:
I guess it's better that one should check with his/her carrier whether his new car would be covered under the existing coverage. The coverage transfer is quite important to understand and the insured has to be aware of all the details associated with it.
Posted: Tue Jun 15, 2010 04:41 pm Post Subject:
Much too broad a statement... and as is, would be incorrect. There are _many_ limitations that would cause this to be 100% incorrect.
Insurance policies seldom offer coverage for additional vehicles. When they do provide coverage for a replacement vehicle they usually offer to continue comp/coll for 30 days and then it's dropped unless the vehicle is added. Many policies will continue liability coverage on a replacement vehicle regardless of when it's added to the policy. Again, this is when one vehicle replace another and the old vehicle needed to have had comp/coll in order for that to be on the newly acquired vehicle.
As mentioned, every policy is different to so this is no guarantee.
Posted: Thu Jun 17, 2010 06:01 am Post Subject:
One thing I'd do is to check if my insurer will cover a new car temporarily. I'd not like to pay for new coverage till I have my new car.
Posted: Thu Jun 17, 2010 01:32 pm Post Subject:
Coverage for a newly acquired vehicle must be reported to your current insurer within 4 or 14 days depending on the coverage in your policy. If you do not have collision coverage, you have 4 days to add the vehicle. If you do have collision coverage, then you have 14 days. Fail to notify your insurer in a timely manner normally voids any coverage on the "new" vehicle.
Posted: Thu Jun 17, 2010 07:02 pm Post Subject:
Coverage for a newly acquired vehicle must be reported to your current insurer within 4 or 14 days depending on the coverage in your policy.
I've never seen a policy require this... 14 days sounds realistic but 4 days? The standard is 30 days.
Fail to notify your insurer in a timely manner normally voids any coverage on the "new" vehicle.
Usually a policy offers different extension on additional vehicles and replacement vehicles. While many carriers modify this area of the policy, many still offer to carry liability coverage in a replacement vehicle even if they are not told about the new vehicle. Liability risk is based on the driver, not the vehicle. So exchanging one vehicle for another does not change the risk.
Posted: Fri Jun 18, 2010 04:40 am Post Subject:
14 days sounds realistic but 4 days? The standard is 30 days.
There is no "standard" such as 30 days. It may be "common" but insurance laws in most states set 4 and 14 days as I have stated as the minimums that insurers must allow so that persons are not driving around uninsured initially. If an insurer wants to allow more time, that's up to them, but it cannot be less.
One needs to read their policy to know for sure. 30 days is overly generous, but that's not to say that some might be. (The concept is similar to that of "free look" periods in life and health contracts -- the laws generally mandate a minimum of 10 days, which most insurers use, but there are some who give everyone 30 days instead.)
There are several insurance companies admitted in California that adhere strictly to these 4 and 14 day minimums.
Liability risk is based on the driver, not the vehicle. So exchanging one vehicle for another does not change the risk.
True, but the make, model, and age of the vehicle has its own direct effect on the premium. Unpaid premium may be deducted from a loss payable in auto insurance just as it is in any other form. Again, one needs to read their policy for the exact "rules" that apply to their situation and follow them. Courts will honor the contract regardless of what the insured believes is fair.
Posted: Fri Jun 18, 2010 06:42 am Post Subject:
Remember that when you're financing the vehicle, it might be difficult for you to obtain bank loans if you don't have the Collision and comprehensive coverage. Under such circumstances, it could be better for you to add coverage till your car purchase is done.
Posted: Fri Jun 18, 2010 07:08 am Post Subject:
Although the lender could be on the hook, most will allow 14-30 days to provide proof of insurance before they add their own brand of property insurance to a vehicle. Whatever a person might be able to obtain on their own, the lender's coverage will be limited to the value of the loan, and will cost as much as 2x-3x compared to an "honest to goodness" auto policy which includes the required liability coverage.
Posted: Fri Jun 18, 2010 10:56 am Post Subject:
It will be spelled out VERY CLEARLY in your policy. In my state (MO) policys CLEARLY state that you have 30days in their policy language.
Posted: Fri Jun 18, 2010 11:42 pm Post Subject:
Regardless of the above information, my feeling is that the "days" we're seeing need to be distinguished between a "replacement" vehicle and an "additional vehicle." All policies address "vehicles acquired during the policy period" within their contract language.
There are definite differences and the coverage in place would be affected by which of these situations occur. As well, it depends on whether the insurer is using ISO forms or their own company forms. What you're going to see below are ISO form information.
For additional vehicles added to the policy:
* It is covered from the date of acquisition, only if insurance is requested within 14 days
* If it's a pick-up or van, it is covered only if not other policy provides coverage
* If the policy had provided different coverages for different autos, it is covered for the broadest coverage provided for any insured auto.
If it REPLACES a vehicle shown in the declarations, it has the SAME coverage as the vehicle it replaced.
If the insured want PHYSICAL DAMAGE on the new auto, it must be reported:
* Within 14 days if the insured has current physical damage coverage
* Within 4 days if the insured does NOT have physical damage coverage. If the insured has an accident within the 4-day period and BEFORE notification, there is a $500 deductible for collision and comprehensive (other than collision) coverage.
Keep in mind that Max is correct in the idea that these are the MINIMUM periods of time; an insurer is always allowed to be more generous than the law allows; they cannot be more restrictive.
Posted: Tue Jun 15, 2010 07:29 am Post Subject:
I guess it's better that one should check with his/her carrier whether his new car would be covered under the existing coverage. The coverage transfer is quite important to understand and the insured has to be aware of all the details associated with it.
Posted: Tue Jun 15, 2010 04:41 pm Post Subject:
Much too broad a statement... and as is, would be incorrect. There are _many_ limitations that would cause this to be 100% incorrect.
Insurance policies seldom offer coverage for additional vehicles. When they do provide coverage for a replacement vehicle they usually offer to continue comp/coll for 30 days and then it's dropped unless the vehicle is added. Many policies will continue liability coverage on a replacement vehicle regardless of when it's added to the policy. Again, this is when one vehicle replace another and the old vehicle needed to have had comp/coll in order for that to be on the newly acquired vehicle.
As mentioned, every policy is different to so this is no guarantee.
Posted: Thu Jun 17, 2010 06:01 am Post Subject:
One thing I'd do is to check if my insurer will cover a new car temporarily. I'd not like to pay for new coverage till I have my new car.
Posted: Thu Jun 17, 2010 01:32 pm Post Subject:
Coverage for a newly acquired vehicle must be reported to your current insurer within 4 or 14 days depending on the coverage in your policy. If you do not have collision coverage, you have 4 days to add the vehicle. If you do have collision coverage, then you have 14 days. Fail to notify your insurer in a timely manner normally voids any coverage on the "new" vehicle.
Posted: Thu Jun 17, 2010 07:02 pm Post Subject:
Coverage for a newly acquired vehicle must be reported to your current insurer within 4 or 14 days depending on the coverage in your policy.
I've never seen a policy require this... 14 days sounds realistic but 4 days? The standard is 30 days.Fail to notify your insurer in a timely manner normally voids any coverage on the "new" vehicle.
Usually a policy offers different extension on additional vehicles and replacement vehicles. While many carriers modify this area of the policy, many still offer to carry liability coverage in a replacement vehicle even if they are not told about the new vehicle. Liability risk is based on the driver, not the vehicle. So exchanging one vehicle for another does not change the risk.Posted: Fri Jun 18, 2010 04:40 am Post Subject:
14 days sounds realistic but 4 days? The standard is 30 days.
There is no "standard" such as 30 days. It may be "common" but insurance laws in most states set 4 and 14 days as I have stated as the minimums that insurers must allow so that persons are not driving around uninsured initially. If an insurer wants to allow more time, that's up to them, but it cannot be less.
One needs to read their policy to know for sure. 30 days is overly generous, but that's not to say that some might be. (The concept is similar to that of "free look" periods in life and health contracts -- the laws generally mandate a minimum of 10 days, which most insurers use, but there are some who give everyone 30 days instead.)
There are several insurance companies admitted in California that adhere strictly to these 4 and 14 day minimums.
Liability risk is based on the driver, not the vehicle. So exchanging one vehicle for another does not change the risk.
True, but the make, model, and age of the vehicle has its own direct effect on the premium. Unpaid premium may be deducted from a loss payable in auto insurance just as it is in any other form. Again, one needs to read their policy for the exact "rules" that apply to their situation and follow them. Courts will honor the contract regardless of what the insured believes is fair.
Posted: Fri Jun 18, 2010 06:42 am Post Subject:
Remember that when you're financing the vehicle, it might be difficult for you to obtain bank loans if you don't have the Collision and comprehensive coverage. Under such circumstances, it could be better for you to add coverage till your car purchase is done.
Posted: Fri Jun 18, 2010 07:08 am Post Subject:
Although the lender could be on the hook, most will allow 14-30 days to provide proof of insurance before they add their own brand of property insurance to a vehicle. Whatever a person might be able to obtain on their own, the lender's coverage will be limited to the value of the loan, and will cost as much as 2x-3x compared to an "honest to goodness" auto policy which includes the required liability coverage.
Posted: Fri Jun 18, 2010 10:56 am Post Subject:
It will be spelled out VERY CLEARLY in your policy. In my state (MO) policys CLEARLY state that you have 30days in their policy language.
Posted: Fri Jun 18, 2010 11:42 pm Post Subject:
Regardless of the above information, my feeling is that the "days" we're seeing need to be distinguished between a "replacement" vehicle and an "additional vehicle." All policies address "vehicles acquired during the policy period" within their contract language.
There are definite differences and the coverage in place would be affected by which of these situations occur. As well, it depends on whether the insurer is using ISO forms or their own company forms. What you're going to see below are ISO form information.
For additional vehicles added to the policy:
* It is covered from the date of acquisition, only if insurance is requested within 14 days
* If it's a pick-up or van, it is covered only if not other policy provides coverage
* If the policy had provided different coverages for different autos, it is covered for the broadest coverage provided for any insured auto.
If it REPLACES a vehicle shown in the declarations, it has the SAME coverage as the vehicle it replaced.
If the insured want PHYSICAL DAMAGE on the new auto, it must be reported:
* Within 14 days if the insured has current physical damage coverage
* Within 4 days if the insured does NOT have physical damage coverage. If the insured has an accident within the 4-day period and BEFORE notification, there is a $500 deductible for collision and comprehensive (other than collision) coverage.
Keep in mind that Max is correct in the idea that these are the MINIMUM periods of time; an insurer is always allowed to be more generous than the law allows; they cannot be more restrictive.
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