Will an insurance company cover damages on a new car that was uninsured under an existing auto policy at the time of the collision with an at-fault driver?
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UPDATED: Jul 31, 2017
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There is no legal way to require the insurer to cover a new uninsured vehicle when you forgot to inform the insurer to add the vehicle to your existing policy. Your insurer only has to cover those vehicles that are listed in the policy. Your only option is to sue the at-fault driver for the damages to your new car.
An insurance policy is nothing more—and nothing less—than a contract: an agreement obligating two parties (you and the insurer) to each do something (you to pay premiums, the insurer to cover certain claims or damages). That means that insurance policies are fundamentally governed or controlled by the same legal principles that govern other contracts.
A contract is governed by its plain terms—that is, by what it says in so many words. A party to a contract (like your insurer) needs to do what the contract says they have to do; and they do not have to do anything not required by the contract. Contracts (and, therefore, also insurance policies) are very specific that way. This extends to which vehicles the insurer needs to cover: the insurer only has to pay out claims on vehicles specifically named in or covered by the insurance policy. If a car is not named in the policy—like a new car– if it wasn’t added to the policy before it rolled off the dealer’s lot—then the insurer does not need to cover it. Because it is not a vehicle the insurer agreed or contracted to cover.
It won’t matter that the policy existed or was in effect at the time of the accident if the car that was in the collision was not named in the policy. Again, the insurance policy is a contract, and like any other contract, the policy only provides those benefits and imposes those obligations which it says, by its plain terms, it does. Therefore, if a car is not listed as being covered under the policy when the accident occurred, then it is not covered by insurance, (The car’s coverage at the time of accident is critical, since the claim arises at the time of the accident, even if filed or submitted later. Thus, it is coverage at the moment of the accident which determines if the insurer will pay). This is why it’s important to make sure a car is covered when you drive it off the lot. And why a responsible dealer will not let you take the car until proof that it’s been added to your insurance comes through.
In this situation, therefore, you could not look to your own insurance to cover any damage or costs. However, if the other driver was at fault (e.g., was driving carelessly or “negligently”) in causing the accident, you can sue that driver (if his or her own insurer does not voluntarily offer you a settlement) for your damages, costs, and losses. If you can show the other driver’s fault, and he has assets or the liability insurance to pay, you can still recover compensation.