What happens to coverage after the owner of an insured vehicle trades it in?

When the owner of an insured vehicle trades it in for a new vehicle, coverage may remain for the new vehicle if the insurance company is notified about the trade-in. It is typical for insurance policies to allow for a grace period during which the new vehicle can be covered, provided that the insurer is informed. This ensures that there is no lapse in coverage when the vehicle is exchanged, protecting the owner from potential risks associated with uninspected vehicles during the transition.

It's important to notify the insurance provider as soon as possible to make sure that the new vehicle is properly covered under the existing policy. Depending on the terms of the insurance policy, the new car may be insured under the same policy terms as the traded-in vehicle until the insured makes official changes to the policy.