Auto Insurance Policy Changes You Should Know About

April 5, 2019

Including updates on flying cars, key fobs and pet injury coverage.

The language of the standard auto insurance policy used by most insurance companies was changed slightly last year. Here are some of the highlights of the changes that went into effect starting September 1, 2018. 

Of the ten principal changes we’ll mention here (out of a total of 30), five apply to the main policy and five are new endorsements made available.

1.   Newly acquired auto – Previously you did not need to notify your insurance company about a newly acquired auto, unless you wanted to include physical damage coverage. Now when you acquire a car, new or used, it must be reported to the insurance company within 14 days. Often there is a difference in premium with a new car even when it’s a replacement vehicle and the insurance companies want to calculate the appropriate premium.

2.   Public conveyance exclusion – Coverage for using your car as a “public or livery conveyance” was excluded in all circumstances, even when its use as such was on behalf of a volunteer or non-profit organization. Work as a volunteer or for a non-profit is now an exception.

3.   Racing exclusion – Use, ownership or maintenance of a vehicle inside a racing facility for any reason was excluded. There is now coverage if the owner is there participating in an educational skill development training course.

4.   Flying cars – Apparently, flying cars are coming soon. At least the Insurance Services Office (ISO), the organization that provides the wording for these policies, thinks so. The new language now makes it clear that your insurance policy applies strictly to terrestrial vehicles.

5.   Transportation expenses – Reimbursement for transportation expenses when a vehicle is damaged was previously $20 per day up to $600; it’s now $30 per day up to $900. The insured now has a duty to report statements of transportation expenses as often as reasonably required.


Optional endorsements:

6.   Key fob – Replacing a key fob costs about $200 and they’re a pain to lose. This endorsement pays reasonable expenses incurred to replace an insured’s key fob if lost or stolen for a covered car without applying a deductible.

7.   Pet injury coverage – When a pet in the front seat is injured in an accident, this endorsement will provide coverage for veterinary expenses. Coverage only applies if both collision and comprehensive damage are insured.

8.   Child restraint system – The National Highway Traffic Safety Administration recommends that car seats be replaced after every collision. This endorsement covers the expense.

9.   Replacement cost coverage – To qualify for replacement cost coverage, the auto must be added within 24 months of purchase, have less than 24,000 miles, be owned by the original owner and must be a total loss. The endorsement states that it will replace with the same make, model and trim level, but it does not specify the same year.

10. Additional Resident of Your Household Endorsement – This is an “additional insured” type of endorsement that amends the definition of “family member” to include a named resident, such as a nanny or domestic partner. The insured is required to notify the carrier if residency changes.


If you feel any of these changes pertain to you, please contact us to determine whether your insurance is affected, as many of the changes were not adopted in all states and by all insurance companies.