In general if you trade in a car that is on your car insurance policy than the coverages that you had on the car you traded in would cover your new vehicle for a short period of time.

State laws and insurance companies' policy terms and guidelines vary though so it is important to speak to your insurance agent if you are going to purchase a car to find out what coverage, if any, your insurer will extend to the new car and for how long. Your insurer may have a "grace period" in which the new car is covered by the coverages of the car that you will be dropping off of your policy to add on the new car or maybe not.

If they do allow the old coverage to extend to the new car than it usually is the same type of coverage meaning that if you only had Liability on the old car you would only have Liability on the new car. If instead you had full coverage of Liability and Physical Damage coverages of Collision and Comprehensive than these too would normally extend to the new car for a short period of time.

We contacted the Arkansas Insurance Department to see if there are any state laws for this situation and they responded that AR Statutes do not address this issue so the answers should be found in your insurance policy.

Consumer Services Division representative for the AR Insurance Department went on to say that in most instances, the insurance policy provides immediate protection for a replacement or newly acquired vehicle for anywhere from 10 to 30 days. The coverage protection is limited to the coverage that you had on the replaced vehicle, or the same as the coverage that you have on the other vehicle(s) on the same policy. If adding a vehicle, the carrier normally accepts the new vehicle with equal coverage as the lesser of the vehicles already on the policy.

The wording is normally found in the General Conditions section of the policy or as added definition to the Collision and Comprehensive coverage. If you are having trouble locating the wording, then discuss this issue with your agent. He or she should be familiar enough with your policy to direct you immediately to the right section for you to read.

So it may be a few days or a couple of weeks that an insurance company gives you to add your new car and change around coverage if you need to do so. It is advisable though to inform your insurance company that you are trading in a car for another at the time that you get the new car so they will be aware of the situation and tell you how long you have to give them the information on the new vehicle.

In the state of Arkansas you are required to have proof of liability insurance on your vehicle in the amount of 25/50/25. This stands for $25,000 for bodily injury or death of one person in any one accident; $50,000 for bodily injury or death of two or more persons in any one accident and $25,000 for damage to or destruction of the property of others.

It is unlawful for any person to operate a motor vehicle within this state unless the vehicle is insured with the minimum amount of liability coverage and if you are found without insurance there is a graduating scale of penalties, all with mandatory fines. So make sure that your insurance policy will cover any new car as soon as you pick it up so you cannot be found guilty of driving without insurance.

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