Is There A Grace Period With Car Insurance
Reader’s Question:
Is there a grace period where I can use car insurance on my new car before getting a new auto insurance?
Michelle
Chicago IL
There is no actual law that gives you a grace period before acquiring an auto insurance for your new car. Most states require car owners to have the new car insured before they can use it or drive it around. But you need to know first, does your existing auto insurance company temporarily cover a new car? It may be adding a new one or just replacing your old vehicle. There are actually auto insurance companies that allow you to extend your existing auto insurance to a new car temporarily.
Since there is no state law regarding extending existing auto insurance to a new car, auto insurance companies will have their own rules and regulations about this. Usually, auto insurance companies will give you 30 days to register your new car and inform them of the new vehicle and some companies even let you extend your existing policy to a new car for about 14days depending on the auto insurance company guidelines. Note as well that there are insurance companies that will not allow you to do that.
If you were able to extend you existing policy to a new car before actually putting it under your policy you must know that the coverage that will be extended to your new car will be exactly the same as the existing policy. No more, no less. If your existing policy is only for a Liability Coverage with minimum limits for your old vehicle, then you will only have Liability coverage with minimum limits for your new car until you inform you auto
insurance company of any changes or the “grace period” expires. Remember some insurance companies will only give you 14days extension period. You may need additional coverage especially if the new car will be financed. Banks technically will require at least Comprehensive and Collision coverage.
You must contact your auto insurance company as soon as possible or within a certain period of time about you new vehicle because your coverage may not be effective if you don’t. They do give you a deadline or a specific amount of time to notify them about your new car. Usually it’s 30 days notification period or less. This will depend on the guidelines of the insurer. It is best to contact your auto insurance company about your new vehicle,this will help you avoid conflict on your policy.