Auto Insurance Coverage for Newly Acquired Vehicles
When a vehicle owner has an automobile insurance policy and acquires a new vehicle, the new vehicle will be automatically covered to the same extent and policy amounts as the insured’s other insured vehicles, if the insurance policy has a provision for newly acquired vehicles. A newly acquired vehicle can be a replacement vehicle or an additional vehicle. The term also includes purchased and leased vehicles.
To qualify as a newly acquired vehicle, the insured must have bought or leased the vehicle after buying the insurance policy under which he or she wants coverage. Some insurance policies will exclude coverage of a newly acquired vehicle if it is insured under another automobile insurance policy. Some policies restrict the type of newly acquired vehicles that will be covered. For example, motorcycles may not be included in the newly acquired vehicle clause.
Most automatic coverage provisions require that the insured notify the insurer within 30 days of acquiring the new vehicle if the insured wants it covered under the existing automobile policy. Be aware that some policy notification periods can be less than 30 days. One insurance company’s notification period was 14 days. If the insured fails to notify the insurer of the newly acquired vehicle within the specified time, the vehicle will be uninsured. Unless there is a specific notice procedure in the insurance policy, an insured’s verbal notice to his or her insurance agent has been deemed sufficient to trigger the automatic coverage for a newly acquired vehicle.
An insured who buys a replacement vehicle or an additional vehicle is not required to use the newly acquired vehicle provision of an old insurance policy to insure it. The insured can buy liability coverage from a different company or a separate policy from the same company that insures his or her other vehicles. Once the insured obtains other insurance for the new vehicle, it will no longer be a newly acquired vehicle under the insured’s old policy. Only the provisions of the new and separate policy will provide coverage for that vehicle.