Is Car Insurance Extendable to a Newly Acquired Vehicle or Another Person?

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Auto insurance can only be used to cover the vehicles listed on the policy. However, it is not a form or Personal Insurance. Many car insurance companies accept the Personal Auto Policy (PAP), which emphasizes the importance of personal attributes. Auto insurance policies, while covering vehicle(s), follow the name(s) listed on the Declaration Page, which is called The Named Insurance.

A car insurance policy cannot be transferred between individuals (except for legally married couples). You cannot ask your insurance company to transfer your coverage to your children, siblings, or friends if you already have one. If you sell the car to a friend or sibling, you can ask your company for termination of your coverage. Once you have received your reimbursement check you may then offer the policy to your friends or siblings as a gift. It is unlikely that your company will offer auto insurance coverages for your friends or siblings. They may not be adequate or suitable, but they might be able to provide auto insurance under certain conditions.

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If you trade your car for a newer model, your insurance will be transferable from the old vehicle to the new one. You will need to call your agent/ insurance broker and inform them about the adjustment. It is important to ask if your vehicle is covered from the moment you purchase it until the time that you add it to your policy.

Most companies will cover your new vehicle immediately if you switch (or replace) it. However, you must report the incident within a certain time period (usually 30 days). If this happens, your current policy’s most comprehensive coverage will be extended to cover the new vehicle. If you have collision and comprehensive coverage on your existing policy, it will be extended to cover the newly acquired vehicle. Many preferred insurance companies will grant collision coverage to newly acquired vehicles for up to 4 days even if it is a liability-only policy.

If the new car is an addition car, the PAP policy provisions are very similar. However, the insured must notify the company within 14 days of the acquisition to extend collision coverage. If the additional vehicle is not planned, collision coverage is null after 14 days.

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There is no doubt that insurance companies will cover the vehicle, regardless of whether it is a replacement or additional vehicle. Here are some points to keep in mind:

1. These guidelines are provided by the Insurance Service Office (ISO) Personal Auto Policy (PAP). They are not the law. These requirements are not mandatory for insurance companies. Some companies may be more flexible and generous than the ISO advises. Other companies might have stricter provisions and not use the ISO form. The first thing to do is read your policy.

2. Even companies that are generous, the extension of coverage will only be granted for the vehicle acquired in the name or spouse of the insured. Even if they are listed on your policy as operators, this does not automatically extend coverage to your child, sibling, boyfriend, girlfriend, or sibling who purchased an additional vehicle, or replaces their existing vehicles. If the vehicle is being used for business purposes, such as delivery, or if it weighs more that 10,000 pounds, coverage will not be extended. A second word of advice: Make sure you read your policy.

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