Indeed, the purpose of the language is to ensure that the company knows what it is insuring and can collect the appropriate premium. An insured may purchase a vehicle that is not covered under the personal auto policy such as a formula one racer, or a vehicle that is more expensive to repair/replace. Say the insured wins the lottery and replaces the 1990 Toyota with a 2007 Bentley Flying Spur for $169,990 or a 2008 Maybach 62 for $429,500. The company needs to know what it's insuring.

As far as strictness of enforcement, in my experience it's pretty strictly enforced. Most states require carriers to treat insured's equally, so if they cover one insured's vehicle even though it wasn't declared they have to do the same for the rest of the insureds. Rare exceptions might be made if the agent made an honest error, but it depends on the company and the situation.

As far as case law, in United Farm Bureau Mut. Ins. Co. v. Elder,

427 N.E.2d 127 (1981), the insured had purchased a second vehicle during the policy term with the intention of replacing the first vehicle with it. The carrier was not notified. The insured tried to sell the first vehicle with no success, and occasionally drove it on the property to keep it running. An accident occurred beyond the 30-day notification period for additional vehicles and the carrier denied the claim. The insured appealed stating that the vehicle was a replacement, not an additional vehicle. The court, after reviewing the parameters of what makes a vehicle a replacement instead of an additional vehicle found for the carrier and let the denial stand.

In Hobby v. Farmers Ins. Exchange, 537 N.W.2d 229 (1995), the insured had replaced a vehicle and had an accident within the 30-day notification period but had not notified the carrier. The carrier denied the claim but the court said that the insured should be covered during that entire 30-day grace period.

In general, the cases stick pretty closely to the policy language; if the accident occurs during the grace period, the time in which the insured is to notify the carrier of a change, coverage is granted. However, when the insured fails to notify the carrier of a change/addition of vehicles within the time frame prescribed in the policy, the courts uphold the denials.