Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

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Reviewed by Leslie Kasperowicz
Farmers Insurance CSR 4 Years

UPDATED: Feb 19, 2016

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Here's what you need to know...

  • If you have an insurance policy, the policy will probably provide coverage for the listed vehicles and for other ‘covered’ autos under the policy contract
  • Under a Personal Auto Policy covered autos are defined as</a> listed vehicles, temporary replacement cars, newly acquired vehicles and owned trailers
  • If you’re buying a new car and already own a vehicle, your existing insurance will provide coverage for the newly acquired vehicle for between 14 and 30 days
  • If you’re trading in a vehicle, the new vehicle will receive the same exact coverage as the trade
  • For additional vehicles, the broadest form of coverage carried on the policy will extend to the new car for a limited period of time
  • Some companies will provide full coverage to new vehicles for up to 4 days when the policyholder carries only liability

Buying a new car is stressful. As a consumer, you need to research vehicle specs, read user reviews, check for recalls, and consider safety ratings before you take a plunge or make an offer. Before you visit a dealership, you should not only be ready to select the right vehicle, you should also be ready to drive off the lot without any problems. The best way to make sure this happens is to walk into the finance office with insurance in hand. Compare car insurance rates now by using our FREE tool above!

If you’re already a vehicle owner, there’s a good chance that you already have coverage to fall back on. This is because auto insurance policies have special provisions written into them that protect the policyholder while they’re driving non-owned or new vehicles. It’s important that you know how these policy provisions work before stepping foot on the sales floor. Here’s what you know about new cars and how they’re automatically covered under your existing coverage:

Understanding the Personal Auto Policy Contract

A Personal Auto Policy is a legally-binding contract that vehicle owners purchase when they want standard insurance coverage.

Under the contract, you agree to pay the premiums you were quoted and, in return for the payment, the insurer agrees to pay for covered claims.

In addition to the agreement, the PAP contract includes a long list of definitions along with terms and conditions that both parties are subject to meeting. Everything that you need to know about your coverage can be found written into your Personal Auto Policy form or contract.

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What is a covered auto?

If you really want to understand how a new car that you buy is automatically covered, you should take a look at the definition of “your covered autos” under your PAP contract. In the contract, it will specifically define each vehicle and explain whether the company will afford coverage or not. Here’s a straightforward breakdown of how your insurer defines the term covered auto:

  • Any vehicle listed on your policy
  • Any vehicle you become the owner of during the policy period
  • Any temporary substitute vehicle used because of breakdown, repair or servicing of your listed auto
  • Any owned trailer

Are there limits to what types of newly acquired vehicles the insurer covers?

Vehicles that you become the owner of during a policy period are called “newly acquired vehicles” in the policy contract. It’s important that you research which types of vehicles are eligible for this classification and which aren’t. Some vehicles might not meet the criteria. You should add these vehicles immediately under a separate plan. Here are vehicles that fit under the policy definition:

  • Vehicles that are purchased during the policy period under the insured’s name
  • Private passenger vehicles
  • Trucks or vans that weigh less than 10,000 pounds and that aren’t used to deliver goods or materials
  • Trucks or vans meeting the previous requirements that are used for farming or ranching

How does coverage extend to newly acquired autos?

You can’t buy a car and assume your insurer will provide you with automatic coverage for the remainder of the policy period. Instead, there are a few different limitations that all prospective car buyers need to be familiar with. First off, the coverage will become available the day that you become the owner of the new car. Second, the amount of days you’ll receive coverage depends on what types of coverage you currently carry. Here’s a breakdown that will sort everything out and make it easier to understand:

  • All Coverage Except Damage to Your Auto: An additional vehicle being added to the policy will have the broadest form of coverage for up to 14 days from the purchase date. If you’re replacing an old vehicle with a newly acquired car, the coverage will be provided without a request from you.
  • Comprehensive and Collision Coverage: For the comprehensive or collision coverage that you already carry to automatically extend to a new car, you need to ask the carrier to insure the vehicle within 14 days of buying the car. If you don’t have full coverage, you must add comprehensive and collision to a car on the policy within 4 days of buying the new car. If a claim happens within this 4-day period and you add physical damage coverage, a $500 deductible will apply to your claim.

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Check Your Policy Before You Buy a Car

If you’re not sure about what type of coverage you carry on your policy, it’s wise to check your coverage before you car shop. Take a look at your most up-to-date declarations page to see what you’re carrying on each car. If you’re trading a car in, see what’s listed on that car specifically. This is what would extend to the new replacement vehicle.

What if you have a liability-only policy?

If you don’t have comprehensive and collision, consider adding it before you even test drive a new car. By doing this, you won’t forget to add the coverage within 4 days of buying the car and you’ll have peace of mind that the insurer will pay for damages if anything were to happen. You might be asked to bring your car in for pictures if you’re adding full coverage suddenly.

What if you’re insured under your parent’s policy?

If you’re not the named insured under the policy, you may not have the benefit of receiving automatic coverage. The only way that the policy will extend coverage is if your parent is a co-owner listed on the registration.

If the car is only in your name, don’t learn the hard way by assuming your car is covered.

Car buyers who don’t have insurance or who are just a driver on an existing policy need to walk into the dealership prepared. Get quotes on all the cars that you like the most. The fastest way to compare pricing is to use an online broker-style auto insurance quoting tool. Save the quotes you like most, and you can change them when you’re ready to buy the perfect car. Enter your zip code in our FREE tool below to compare car insurance rates now!