Did Your Car Dealer Forget To Add Your New Car To Your Auto Insurance Policy?

What a huge thrill.  Taking your new or even gently used car home from the dealership is a big day for anyone.  But before you drive off that lot you need to make sure that your insurance is in place on this new car.

Car dealers always want to help make the car buying process as painless as possible.  That’s why they often offer to handle the call to your insurance company for you to add coverage for your new car to your auto insurance policy.   And this seems more than convenient, but for some unlucky people this convenience has come at a huge cost.  I’m an insurance agent and have been for 30 plus years.  My word of advice is that you don’t leave this job to someone else.  Mistakes and oversights happen and we are discovering more and more cases where we don’t know about a new car purchase until months after it actually happened.    If this discovery comes after your car has been totaled in a wreck then you might lose quite a lot of money.   Please don’t delegate this important part of the car buying process to anyone else.

With that in mind, it might help to review exactly what the NC auto insurance policy says about changing  the cars on the policy.   I must preface this discussion by saying that this blog is oriented around the North Carolina Personal Auto Insurance Policy form so if you are located  in another state, or if your vehicles are insured on a commercial auto insurance policy then what you read below may not be accurate for your particular situation.  Also,  I want to keep the attorneys happy here by saying that whatever you read in this blog may or may not be accurate for your particular situation and that there is no substitute for reading your policy as what is written there will supersede anything that you read here.

Ok, so we have the disclaimers out of the way, now let’s see what the NC Personal Auto policy says about vehicle changes.  The policy form addresses this issue as two different categories which I will call replacement vehicles and newly acquired vehicles.  Replacement vehicles language refers to the case where you are replacing one vehicle with another one.  The newly acquired vehicles language will refer to the instances when you have acquired a vehicle and are also keeping all of your existing vehicles.  We will study each of these situations separately.

Here’s what the policy language says regarding replacement vehicles:  “If a newly acquired auto replaces a vehicle shown in the Declarations, it will have the same coverage as the vehicle it replaced except that coverage, if any, under Part D – Coverage For Damage To Your Auto applies only if you ask us to insure it within 30 days after you become the owner. “  For me, that means that if you replace one vehicle with another then the liability insurance will apply to the new vehicle no matter if you forget to tell the insurance company or not.  But the physical damages protections under coverage D, called collision and comprehensive coverage, will not be available for the new vehicle unless you ask the insurance company to make this vehicle change on the policy within 30 days of the purchase of the new vehicle.  So if your car dealer forgets to call in the car change, and you don’t catch the oversight, then after 30 days the new car will have no comprehensive or collision insurance in force if it replaced a car that had comprehensive and collision coverage in place.  Of course if the replaced vehicle was insured for just liability insurance, then that is all that you will ever have on the replacing vehicle unless you ask the insurance company to make the car change on your policy.

Regarding the situation where you purchase an additional vehicle that is not replacing a vehicle on the policy, the insurance policy language reads this way: “If the newly acquired auto is in addition to any shown on the Declarations, it will have the broadest coverage we now provide for any vehicle shown in the declarations if you ask us to insure it within 30 days after you become the owner.”   In this case your comprehensive and collision protection will be automatically apply to the new car as long as at least one other car on your policy has this coverage.  But all insurance on that new car will end if you don’t ask the insurance company to add the car to your policy within 30 days.

The take away for you as an insurance consumer in North Carolina is that it is your responsibility as the car owner to notify your insurance agent or insurance company as soon as you take ownership of an additional or replacement vehicle.  Leaving this detail to your car dealer could put your insurance protection and thus your assets in jeopardy.

At Clinard Insurance Group, located in Winston Salem, NC,  we insure thousands of families all across the state of North Carolina.  If you need help with your auto or home insurance,  or even your business insurance or your life insurance, please feel free to call us, toll free, at 877-687-7557.