Ever take insurance advice from your neighbor? Unless your neighbor has read your specific insurance policy, that might not be a great idea. (No offense to your neighbor. I bet you have a great neighbor.) Sometimes we hear things that aren’t quite correct. I’d like to talk about some iffy statements regarding insurance coverage I have heard over my 27(YIKES) years of being an insurance agent.
The first iffy statement goes something like this: When I buy a new vehicle, I have 30 days of free coverage.
Is that true?
Nope. That’s my answer. You are welcome.
Just kidding. Let’s start at the first part of the question: When I buy a new vehicle.
A new vehicle is just a new vehicle, right? Your insurance policy will define what a new vehicle is to them.
One company defines a newly acquired auto as:
- A private passenger auto; or
- A pickup or van, for which no other insurance policy provides coverage, that:
- Has a gross vehicle weight rating of 10,000 lbs. or less; and
- Is not used for the deliver or transportation of goods and materials
Another company says it will cover:
An additional four wheel private passenger auto or utility auto you become the owner of during the policy period. This auto will be covered if we insure all other private passenger auto you own.
I recently had a client who purchased a new snow machine trailer. If he was insured with the first company, he would not automatically have coverage. If he was insured with the second company, he would have automatic coverage if he has all of his autos insured with that same company.
There are companies that say they will only cover newly acquired vehicles if it’s a vehicle they approve of. How are you going to know if your new vehicle is approved? My head is about to explode!
Let me talk about the second part of the iffy statement: 30 days of free coverage. Woot woot!
Wait, is that true? Again, nope. Some insurance companies give you 14 days to add a new vehicle to the policy. Some give you 30, and we even have a company that will give you 60 days! When you add the vehicle, you will be asked the purchase date and the vehicle should added to your policy effective the day you bought it. That means you will actually pay for the insurance for the entire time you have owned the vehicle. NO FREE DAYS!
In my view, the only thing you are accomplishing by not adding the vehicle to your policy when you purchase it is increasing your chance of forgetting to add it within the required number of days. If that happens, you have no coverage up through the day you add the vehicle. For me, I could have insurance for 25 years and the day I don’t is the day I’ll get into an accident!
I haven’t even talked about the various coverages extended (or not extended) to a new vehicle!
The moral of the story: Just add the vehicle to your policy right away. That way you will know you have the coverage you need.