Who's responsible for an error on insurance forms?

This is a strange situation, because almost all automobile insurance policies carry a grace period of at least 15 days (usually it's thirty) for adding a new vehicle. And, in your case, it's a replacement vehicle, so it's not like you're trying to insure two vehicles for the price of one.

Unless your policy expired or was cancelled -- or unless it has something to do with your vehicle being a lease -- I can't imagine why your carrier would deny coverage.

It's unlikely you have any recourse against the dealer, who would (rightly) assume the coverage had been transferred. You need to dig deeper with your own insurance and find out just why they denied coverage, as well as ask for a copy of your policy and get your carrier to quote the specific language on which their denial is based.

If you can't discover any reason in your policy why they would deny, this would certainly be a matter to bring up with your state's division of insurance (usually locatable on the web or in the blue pages of your phone book). Most divisions of insurance are fairly powerless unless they discover an insurance company has contravened a provision in a first-party policy, at which time they can help you quite a bit (including fining your carrier).

Even though this question was from July, I felt compelled to add the following:

If it turns out that your carrier does have a provision in your policy that automatically cancels the coverage when a replacement vehicle is purchased or leased, you definitely need to notify your division of insurance. There is abundant case law to show how such a provision would be contrary to public policy. To place a paying insured (you) in such a risky situation, not to mention the effects to an injured claimant if you had an accident, is really quite absurd.

When yo purchase a new or used vehicle and do not call the insurance company right away are you covered on the new car even as you are fully covered on other cars in your name. Also if you are a dealer and sell a car to a person after hours and are unable to verify the coverages, are you liable if th ebuyer has a accident before the insurance is placed on the car he bought? Thanks Brain


If you were insuring a vehicle you didn't own on your policy because you assumed that the car dealer would 'take care of it' then you are the one who is responsible. A couple of things:

No reputable insurance company is going to take the word of a car dealer to remove a vehicle, or even confirm you have coverage, on a policy without your OK first.
Your policy states that it is your responsibility to notify the company when changes occur.
However, if you provide proof that the vehicle left your custody on X date (namely a bill of sale or lading) then the insurance company will likely backdate the removal of the vehicle.

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