So, you found THE CAR. You've given it a name and are basking in that new car smell. Basically, you’re "over the moon" right now.
Somewhere in your car-buying afterglow, you recall the salesman saying something like, "Yep, I'll call your insurance agent with the details, so the vehicle can be added to your insurance policy." But, it's now the next day and you've got the wind in your hair and your favorite tunes playing. You're already planning your amazing cross-country road trips with Storm (your new car) and assume everything is OK.
Except it's not.
The salesman didn't call.
Then, the accident happened.
Then the adjuster says you have no coverage.
Go ahead and think of any four letter word you can to describe your reaction at this point. I'll wait.
Why You Should Never Let Your Car Dealer Near Your Ohio Auto Insurance Reason #1
Let me be clear, dealerships may offer to make this call, but please know they are under no legal obligation to do so. And when they fail to make the call, the outcome can be DEVASTATING.
If you've been to a car dealership sometime since Henry Ford invented the Model T, I'm sure you've noticed the insane amount of activity that goes on. People in and out, papers flying, deals being negotiated. That constant pressure to make the next sale (often as soon as they hand you the keys) makes it easy to forget that phone call.
So it doesn't happen. But you assume it did.
And you may not realize until you don't get an ID card. Or a new declarations page. Or a bill for the addition. And this might take a few weeks for you to notice.
Or the worst of all- when the claim happens.
Why You Should Never Let Your Car Dealer Near Your Ohio Auto Insurance Reason #2 (and this is a BIG one)
Besides the fact that dealerships say they will call and don't, I've also heard salespeople say things like this, "You have plenty of time to call your insurance agent and get the car added, at least 2 weeks to a month."
This is one of the biggest mistaken assumptions out there. There are VERY SPECIFIC time limits to notify your insurance about a "newly acquired auto."
Not only that, but the organization that writes the auto insurance policy for most insurance companies in the U.S. just introduced some important changes.
These changes will severely restrict the amount of time you have to add a new car to your policy and are set to take effect September 1, 2018.
So, while currently there's some slack in adding a new vehicle (although not as much as dealerships think though), eventually there won't be.
It’s up to your insurance company when they enforce this new rule, however I believe that it's only a matter of time before it becomes the standard.
Here's the Nuts & Bolts About Notifying Your Insurance Agent When You Buy a Car
How auto insurance treats a newly acquired auto NOW
The Insurance Services Office (ISO) created a standard auto insurance policy that many insurance companies use. For you insurance folk out there, I'm referencing the 06/98 version.
So, ISO offers up a nice definition of what a "newly acquired auto" is:
Newly acquired auto means any of the following types of vehicles you become owner of during the policy period:
a. A private passenger auto; or
b. A pickup or van, for which no other insurance policy provides coverage, that:
1) Has a Gross Vehicle Weight of less than 10,000 pounds; and
2) Is not used for delivery or transportation of goods and materials UNLESS such use is:
a) incidental to your business of installing, maintaining or repairing furnishings or equipment; or
Side note- what this definition tells you is that the personal auto policy is NOT designed for commercial vehicles. If you have a truck heavier than 10,000 GVW or is used for commercial purposes, you need a commercial auto insurance policy. You can read our article 7 Ways to Know When to Purchase Commercial Auto Insurance for additional helpful information.
For all coverage EXCEPT comprehensive and collision
A newly acquired auto will have the broadest coverage for any vehicle shown on the policy. If the new vehicle replaces a vehicle shown on the policy, there is no requirement to notify (note- this only applies until the end of the policy period. So if your policy runs from 10/1- 3/1 and you buy a car 1/1, the "automatic" coverage only applies until 3/1). If it's an additional vehicle, you must request it to be insured within 14 days after you become owner.
If you need comprehensive and/or collision (sometimes referred to as "Full Coverage")
If you need comprehensive coverage for your new vehicle, but do NOT currently have comprehensive coverage on any vehicle on your policy, you must ask for the vehicle to be insured within FOUR days of becoming owner. FOUR days folks! Not two weeks, not 30 days.
What if one of your vehicles DOES have comprehensive and/or collision?
Then you get 14 days to get it insured. Same time limit applies if one of your vehicles requires collision as well- if one of the vehicles on the policy has it, you get 14 days to get it insured.
What the September 1, 2018 changes will mean for newly acquired autos
When you acquire ANY vehicle (regardless if it’s new or a replacement), you are required to notify the carrier within 14 days. Therefore, new notification requirements are taking place and essentially no more automatic long-term coverage is provided (Source- 30 Changes to ISO's Personal Auto Policy).
AGAIN, this language is not effective UNTIL your insurance company adopts this version of the personal auto policy.
So, no need for panic yet. BUT, it’s important to know what’s coming your way and understand the changes insurance companies are making. There’s a good chance too many people abused the automatic coverage, so insurance companies got tired of giving it away for free.
What YOU need to do to make sure your new vehicle is covered
Keep in mind that although the dealership may offer to make the call on your behalf, ultimately you are responsible for making sure we have the information to add the vehicle to the policy.
So, do yourself a favor and call just to check. Or send an email. Or fill out a contact form on our website. You may think you're being a bother, but I promise you're not. The worst thing is assuming your car has been added and then being involved in a car accident and learning you have no coverage.
We're here to help. Call us to discuss your Ohio auto insurance or click below.......