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A new-car grace period in Indiana is a temporary coverage extension of your existing auto insurance policy to your newly acquired vehicle.
Indiana law requires insurers to provide a minimum grace period after you buy a new or used vehicle. But many insurance companies extend coverage beyond the legal requirement — typically for seven to 30 days.
Grace-period car insurance applies only if you already have an active policy in place. The length and terms of the grace period vary by company, so check with your insurance agent before purchasing a vehicle.
Whether you’re adding a new car or replacing one on your policy, Indiana law guarantees a grace period after you purchase a vehicle. Your insurer must provide at least 14 days of liability coverage. If your policy includes comprehensive and collision coverage, you’ll also receive four days of physical damage coverage.[1]
That said, many car insurance companies extend this coverage window, typically offering a grace period of up to 30 days. The exact time frame depends on your insurer and the type of policy you have.
Situation  | Typical Grace Period in Indiana |
|---|---|
| Adding a new car | 14 days of liability coverage and four days of physical damage coverage by law, but up to 30 days of coverage, depending on insurer |
| Replacing a car | 14 days of liability coverage and four days of physical damage coverage by law, but up to 30 days of coverage, depending on insurer |
| No existing policy | No grace period |
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Buying a car doesn’t mean you automatically have insurance. It depends on your existing coverage. If you’re replacing a car or adding one to your policy, your current insurance coverage extends to the newly acquired vehicle for the duration of your grace period.
If you don’t already have coverage, though, you’ll need to purchase a new policy. Indiana car insurance laws require drivers to carry at least 25/50/25 in liability coverage.[2]
Most dealerships also ask for proof of insurance before handing you the keys, especially if you’re financing your car. First-time buyers can find the best car insurance rates in Indiana by comparing pricing from multiple insurers in advance.
The type of coverage you carry also matters. If you have a liability-only policy, only liability coverage extends to the new vehicle. With a full-coverage policy, your new car will also have comprehensive and collision coverage.
But Indiana law requires insurers to extend physical damage coverage for only four days.
What your grace-period car insurance covers depends on your existing policy. Liability coverage that meets Indiana’s minimum insurance requirements ($25,000 bodily injury per person, $50,000 bodily injury per accident, and $25,000 for property damage) extends to your new vehicle automatically.
If you have full coverage, your new car will also have protection against physical damage. Indiana law requires only four days of coverage with a maximum $500 deductible, but your insurer may extend the grace period.
Your existing coverage limits typically apply to your new vehicle during the grace period, but it’s best to check with your insurer to confirm.
Adding a new car to your Indiana insurance policy is a relatively straightforward process. To avoid any coverage gaps, it’s best to do it as soon as possible.
Gather your vehicle information. Have your new car’s vehicle identification number (VIN), make, model, year, license plate, and purchase date handy before contacting your insurer.
Contact your insurer or log in to your account. Many companies let policyholders add a new car to their policy online or over the phone.
Review your coverage. Adding a new car is a good opportunity to make sure you have the coverage you need. This is especially important if you’re financing your vehicle, as lenders typically require full coverage and sometimes gap insurance.
Request updated proof of insurance. Once you add the new vehicle to your policy, request a new insurance identification card. Indiana requires all drivers to carry proof of financial responsibility.
Register your vehicle with the Indiana Bureau of Motor Vehicles (BMV). Present your proof of insurance at a local Indiana BMV branch or via the BMV website to register your vehicle.
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A coverage lapse means driving without insurance, which violates Indiana’s financial responsibility laws. Penalties can include a license suspension, reinstatement fees of up to $1,000, and an SR-22 requirement.
If you cause a car accident while uninsured, you’d have to pay for your own vehicle repairs and the other driver’s expenses out of pocket. A lapse in coverage can also result in higher premiums when you purchase a new policy.
Indiana drivers have 45 days to register a newly acquired vehicle, but you shouldn’t wait that long to update your insurance.[3] The tips below can help you avoid a coverage gap after your vehicle purchase:
Contact your insurer before purchasing your vehicle. Ask your auto insurance company about your grace period and coverage limits before finalizing the sale.
Set your coverage start date in advance. If you’re a first-time insurance buyer or switching companies, schedule your new policy to start on the day you take ownership of your car.
Understand your lender’s requirements before buying. If you’re financing or leasing a vehicle, your lender will typically require full coverage. Make sure you factor that extra cost into your insurance budget.[4]
Don’t rely on the grace period as a long-term plan. Indiana law guarantees only 14 days of liability coverage and four days of physical damage coverage for a new car if your existing policy already includes full coverage. Letting your coverage lapse means you’ll have to pay damages out of pocket if you’re in an accident, and it could also increase your car insurance rates in the future.
Understanding your new-car grace period in Indiana can help you avoid gaps in coverage, whether you’re buying in Fort Wayne, Indianapolis, or elsewhere in the state. Answers to frequently asked questions can help you understand what your insurance covers and for how long.
No. You must have an auto insurance policy that meets Indiana’s minimum-coverage requirements to drive a new car home. If you don’t have an existing policy, you’ll need to purchase coverage before driving your car home. And if you finance or lease your car, your lender will require a full-coverage policy.
Your coverage start date is the day you take ownership of your new vehicle. Indiana state law requires insurers to provide a new-car grace period effective on the date you buy your car.
Indiana law guarantees a minimum 14-day grace period for liability coverage on a newly acquired vehicle. Your insurer may offer a longer window, and some companies extend coverage up to 30 days.
Your existing coverage applies if you have an accident during the grace period. You’ll file a claim the same way you would for any other vehicle on your policy. Contact your insurer immediately after the accident to start the claims process.
Yes. Indiana law requires you to notify your insurer of a newly acquired vehicle to receive the grace-period coverage. Contact your insurance agent as soon as possible after your vehicle purchase.
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5+ years experience in personal finance writing
Personal finance blogger
Licensed property and casualty insurance agent
10+ years editing experience
NPN: 21630969
Licensed auto and home insurance agent
4+ years experience in insurance and personal finance editing
NPN: 20564519
Featured in
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