Florida 20-44 Resident Personal Lines Agent License Practice Exam 2025 - Free Personal Lines Agent Practice Questions and Study Guide

When a policyholder like Robin trades in her vehicle but does not inform her agent, it typically leads to the situation where both cars are still considered under the existing policy until the insurance company is notified of the change. This is due to the fact that most personal auto insurance policies have provisions that automatically extend coverage to newly acquired vehicles for a specified period, usually 14-30 days, and often cover the newly acquired vehicle in lieu of the traded-in vehicle. Therefore, as long as the new vehicle was acquired during this grace period, both vehicles can still be under coverage, thus allowing for a seamless transition of protection without a lapse.

This explanation underscores the importance of understanding how personal auto policies operate concerning vehicle ownership and coverage continuity. It's always best practice, however, for the policyholder to communicate changes to their insurance agent to ensure that the correct coverages are maintained and no gaps occur.