How Much Coverage Do I Have?

A private passenger auto (car) or an eligible pickup or van becomes a “newly acquired auto” on the day the insured becomes the owner. However, when it comes to a van or pickup the vehicle may not be used for transporting materials or goods (excluding farm use).  

Difference Between a Replacement Vehicle and an Additional Vehicle 

It’s important to know the difference between a replacement vehicle and an additional vehicle. A replacement vehicle is when the vehicle simply takes the place of an existing vehicle. While an additional vehicle is when another vehicle is added to the family fleet, which creates an additional exposure. Now the question is, why does this matter? The difference matters in terms of the amount of time the insured must inform the insurance company of the newly acquired vehicle. 

What is Covered? 

A replacement vehicle is automatically covered (most coverage) on the day the insured purchases the vehicle whether or not the insured reports it to the insurer. This coverage would include liability, medical payments, and uninsured motorists coverage. In terms of physical damage coverage, it follows a separate path than the other coverages mentioned. If at least one other vehicle has collision damage coverage, the newly acquired auto automatically has temporary collision coverage as of the date of acquisition, and the deductible is the lowest deductible applicable to any listed auto. In this case, the insured must request permanent coverage within 14 days. This goes for comprehensive coverage as well.  

An additional vehicle is automatically covered as well but must be reported to the insurer within 14 days of purchase. If the insured waits longer than 14 days, the coverage doesn’t begin until the request is made to add the vehicle to the policy. The coverages that apply would be the same as the replacement vehicles coverages (liability, medical payments, and uninsured motorists coverage). It’s important to keep in mind that if the insured’s listed vehicles don’t all have the same coverage, the newly acquired auto automatically receives the same coverage as the listed vehicle with the broadest coverage (lowest-deductible). As for physical damage coverage, if no car listed on the policy has collision coverage, then the PAP provides temporary automatic collision coverage for up to 4 days and is subject to a $500 deductible. This goes for comprehensive coverage as well.  

Keep In Mind 

Even though your vehicle would automatically provide basic coverage through your current policy, it’s still important that you make sure your vehicle is properly covered. Our recommendation is to contact your local agent at Staples & Associates prior to purchasing the new vehicle so you can discuss what coverage is best for you.