New Car Insurance Grace Period

Updated August 6, 2024

Are you wanting to do some car shopping this weekend? If you buy a car but can’t get ahold of your insurance agent, is it covered? This answer is……..it kind of depends. Here’s what you need to know about your new car insurance grace period.

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Key takeaways

You’ll likely have a grace period of 30 days with most policies
You may not have full coverage during your grace period
Always talk to your agent before buying a car on the weekend

Let Your Agent Know Ahead of Time

If you already know what vehicle you’re purchasing you can let your agent know ahead of time. Then, they can set the effective date for the day you’re getting the car. If you don’t know the VIN number, it helps to provide your agent all the info you do have like the vehicle year, make, model and trim level.

Then, once you have the VIN number, they can quickly plug in that last missing piece of information making for a quicker transaction.

However, if your agent isn’t available on Saturdays, this isn’t going to work.

Grace Period

Your policy may provide a grace period for this type of situation. Basically, this automatically provides coverage for a temporary amount of time on a new vehicle purchase until you report it to your insurance company.

Beware: New car grace periods vary from policy to policy so you need to check first, or ask your agent to be clear. Don’t just assume you’re covered.

Coverage During Grace Period

Your grace period likely only provides the same coverage you currently have on your policy. For example, if you have one vehicle with liability only on your policy, your new vehicle will only have liability coverage. So, you will not have Comprehensive or Collision coverage (referred to on the streets as “full coverage”) with some insurance companies.

If you’re buying a vehicle, you’re likely going to want Comprehensive and Collision. Not to mention if you have a loan, the bank (lienholder) is going to require you to have this coverage in addition to Liability. If you drive that car off the lot and are in an at-fault accident, you have no coverage to repair the damages to your car and you’re going to be in a very bad financial situation. On a related topic, make sure you purchase GAP insurance.

But wait……there are some exceptions.

If at least one of the vehicles on your policy has Comprehensive and Collision coverage, you should also have that coverage applied during the grace period.

We checked three well-known carriers; Travelers, Safeco and Progressive for details on their grace periods. All three of them will give you a 30 day grace period providing the same coverage as the most insured vehicle currently on your policy.

However, Travelers and Safeco will give you a 4 day grace period that includes Comprehensive and Collision coverage even if you don’t have a current vehicle on your policy with that coverage. Progressive will not so you better plan ahead. This is yet another reason why all auto insurance policies are not created equal.

Existing Policy

You must have a policy in force for a grace period to provide coverage for your newly purchased vehicle. If you don’t currently have a policy in force you can’t purchase one on a Monday and backdate coverage for a vehicle purchased over the weekend.

Any of the coverages we’ve discussed can vary depending on your geographic location, insurance carrier and specific policy. Check with your agent to verify your car insurance grace period. Communication is key. We’re always happy to answer these questions for our clients. We’d much rather take these calls than to have an uncovered claim.