Your thoughts and comments are appreciated as to how you interpret this section.

California Subscriber

You have a common and confusing situation, so let's break it down. The policy is a self-contained item, and applies to the policy period as listed in the declarations. A renewal is a continuation of coverage for the next time period.

The addition of a new or replacement vehicle receives the broadest coverage on the policy except for damage to your auto, physical damage coverage. If the insured had a 2000 Toyota and replaced it on 3/24 with the Cadillac, the broadest coverage on the policy applies. The same applies if the Cadillac is an additional vehicle. (Note some carriers will apply the coverages from the Toyota to the Cadillac if it is a replacement.) The only difference is that if the Cadillac is a replacement vehicle, the insured does not need to notify the carrier of the change. If the Cadillac is an additional vehicle, the company must be advised within 14 days.

If any car on the policy had physical damage coverage then the insured needs to request it for the Cadillac within fourteen days. If no cars on the policy had physical damage coverage, the insured has four days to add the physical damage coverage for the vehicle.

Under newly acquired auto, the policy states that if the insured asks to add the vehicle after the 4 or 14-day time limit to add coverage that the coverage will begin at the time the insured asks for coverage. The 14 days is 14 days; regardless of whether it spans two policy periods or not. The renewal is an extension of the existing policy, and is not a new policy. Note that in the conditions under termination, if a renewal is offered the policy terminates at the end of the period only if the insured does not accept the renewal; therefore, if the insured accepts the renewal the policy continues smoothly.

For example, the insured buys the Cadillac 3/24 to replace the Toyota ; the insured does not need to advise the carrier of the change in vehicles in order to have liability coverage on the Cadillac. This liability coverage will span the renewal; if there's a loss the carrier may want any difference in premium paid, but the liability coverage is there.

But the insured wants physical damage coverage, so the carrier must be advised of the need for physical damage coverage within the 14 days, even though it replaces the Toyota which had physical damage coverage. But the insured gets busy and forgets; he then calls his agent on 4/25 and advises that he has a new vehicle that needs to be exchanged for the Toyota . The physical damage coverage will be added as of 4/25 and no sooner; the 14 days have passed. So the vehicle is covered for liability from 3/24/07 forward; the policy renews 3/31/07, and the insured advises the company of the change on 4/25 and that is when physical damage coverage is added to the vehicle. There is no physical damage coverage on the vehicle between 3/24 and 4/25. Once the 4 or 14-day grace period has passed, there is no backdating of coverage and the 14-day grace period no longer exists.

It works the same way if the Cadillac is an additional vehicle, the insured just has less time to notify the company of the desire for physical damage coverage; he has 4 days instead of 14.