Insuring a New Automobile FAQ

I am thinking about buying a car over the weekend. How do I get coverage on the new car when your agency office is closed?

That’s an excellent question, and it’s a question that our customers ask frequently.

Auto dealers make it very easy to buy a new car these days. New car buyers usually need to provide only an ID card showing proof of liability insurance and off they go. This practice makes it easy for the dealer and the buyer to overlook proper insurance coverage on the new vehicle. The same thing is true if you intend to purchase a vehicle from a private seller.

Unfortunately, the only way to be sure you have exactly the coverage you need on a newly purchased vehicle is to call your agent before you drive away from the dealership. That of course is not always possible. Fortunately, all policies provide some automatic coverage on newly acquired vehicles, but not all policies provide the same automatic coverage.

The first important point to know is that your policy provides coverage only on new vehicles purchased or acquired by the person who is named on the policy - the “named insured” - and the spouse of that person if he or she resides in the same household. If you are going to acquire a new vehicle for one of your children or another relative, and intend to issue the title in that person’s name, there is no automatic coverage on your policy. If that is the case, you definitely need to contact your agent before driving the new vehicle away from the dealership or the private seller’s location.

In addition to the ownership requirement, automatic coverage applies only to certain types of vehicles. Cars are covered, as are pickups, vans and SUVs with a GVW (gross vehicle weight) of less than 10,000 pounds, as long as they are not used for transportation of goods in a business. (Some policies will cover new pickups, vans and SUVs up to 25,000 pounds.)