Is Your New Car Covered Under Your Auto Insurance Policy?
Updated: Aug 17
Originally published in the ERIEsense Blog by Erie Insurance on August 2, 2019.
You’ve been patiently searching for the perfect new car. You just signed your name on that last piece of endless paperwork. Now, with keys in hand, it’s finally time to drive off the lot.
But as you take in that new car smell, a thought suddenly crosses your mind: Do I have insurance?
Good news: If you’re an Erie Insurance customer, the short answer is usually “yes.” Here are some common questions about how insurance works when buying a new car.
DO I HAVE INSURANCE WHEN I DRIVE MY NEW CAR OFF THE LOT?
When you’re with ERIE, your current auto policy doesn’t just vanish when you trade in your old vehicle. As long as your new vehicle is titled in your name, your coverage carries over when you buy a new vehicle of the same type.
So, if you already have a car insured with ERIE and you’re buying a car, the coverage rollover applies. But if you’re buying a first-time motorcycle or RV, your auto coverage won’t roll over since you’re buying a different type of vehicle. (Read more about insurance for miscellaneous vehicles.)
If you’re buying an additional vehicle, your new car will have the broadest coverage purchased on any vehicle on your ERIE policy for your household. If another private passenger vehicle you own isn’t insured with ERIE, coverage from ERIE does not automatically roll over. You can always ask your ERIE agent about what to do in your specific situation.
Here’s an example: Let’s say you, your spouse and your teenage son are all on the same ERIE policy. Your spouse’s newer SUV is covered with high limits and multiple endorsements, like ERIE Auto Plus and Roadside Service Coverage. However, you opted not to get all the bells and whistles on your teenage son’s old high-mileage clunker. When you buy a new car, the broadest coverage – in this example, what’s on your spouse’s SUV – is what will temporarily apply to your new ride.
HOW LONG DO YOU HAVE TO REPORT A NEW CAR?
If you you’re actively car shopping, it’s smart to talk to your agent ahead of time. If you’re looking at a specific make and model – say, a certain zippy hybrid or a four-wheel-drive pickup – your agent can help you estimate what you’ll pay in premium and suggest ways to save.
Remember to report any changes promptly to your ERIE agent. If you forget, don’t stress: You’ve got wiggle room. Don’t wait too long, though, since your ERIE agent can help you personalize your policy with coverage that might make sense for your new vehicle but not your old one, like the New Auto Security Coverage Endorsement.
In general, here’s how things work with three common types of coverage:
Liability coverage: Let us know about your new vehicle before the end of your policy period. (Wondering what to expect when your policy renews? Check out our Auto Insurance Renewal Guide Infographic.) If you buy your new vehicle within 30 days of the end of your policy, you have some wiggle room. Just make sure you report it to us within 60 days after acquisition, purchase or lease.
Comprehensive and collision coverage: When these roll over from your existing policy, the lowest deductible applies. If you didn’t have comprehensive and collision on your old car, you have a 7-day grace period from time of acquisition, purchase or lease where you’re covered with a $500 deductible.
WHAT INFORMATION DO I NEED TO REPORT A NEW VEHICLE?
Have this information on hand to report your new car to your insurance agent:
Make, model and year
Expected annual mileage
General usage information (such as how far you drive to work)
Vehicle identification number (VIN)
Titling and lienholder information
WHAT IF I'M BUYING A CAR ON THE WEEKEND?
See the grace periods listed above. It’s a good idea to get in touch with your ERIE agent on the next business day after acquiring your vehicle, though. That way, they can get everything updated and personalized to protect your new ride.
If you need to verify your coverage during or after normal business hours, contact Customer Care at (800) 458-0811 between 8 a.m. to 11 p.m. Monday through Friday, and 9 a.m. to 4:30 p.m. Saturday.
WILL MY INSURANCE GO UP IF I BUY A NEW CAR?
You could see some changes to your insurance premiums when you buy a new car. Remember: What you pay on your auto insurance bill depends largely on two factors: what you drive, and how you drive.
Safer cars do a better job protecting the people inside them. So if your new vehicle has high safety ratings (as determined by the Insurance Institute for Highway Safety), it’s usually less expensive to insure than a model that didn’t fare so well in crash tests. Car alarms and anti-theft tracking devices can lower your premium, too.
Your local ERIE agent can help explain the different factors that affect your rates and suggest ways to save. Want to learn more? Get an in-depth look at what determines the price of your auto insurance or read about these 7 common auto insurance discounts.
WHAT INSURANCE DO I NEED WHEN BUYING A NEW CAR?
It’s true: A new car depreciates the moment you drive it off the lot. That means if your car gets totaled, you could be in a tough spot if the actual cash value of your car is less than what you still owe on your car loan.
Good news: There’s a smart way to protect your investment. Talk to your local ERIE agent about adding the New Auto Security Coverage Endorsement* to your ERIE auto policy for a few extra dollars per month.
Buying a used car? The endorsement also offers “better vehicle replacement” for older vehicles. That means if yours gets totaled, we’ll replace it with a same or similar make of vehicle up to two model years newer with up to 30,000 fewer miles.
It’s just one more way we’re looking out for you. Learn more about auto insurance from ERIE or request a free quote from our talented ERIE Agents at Ashley Insurance Agency.
Justin Metz and Abby Badach Doyle contributed to this story.
*A vehicle is considered new when it is less than two years old. Eligible vehicles must carry both comprehensive and collision coverage and replacement must be made with a comparable model. The endorsement is sold on a per-vehicle basis, not per policy, and contains the specific details of the coverages, terms, conditions and exclusions. Coverage is not available in all states. Please refer to our disclaimer and talk to an ERIE agent for policy details.