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.
