Darren took Peyton for a ride in his gyrocopter. Unfortunately, the gyrocopter crashed killing both of them. Peyton's mother sued Darren but Old Republic Insurance Company denied coverage because the gyrocopter was not scheduled on the policy. The mother argued that an attached endorsement containing multiple parts would provide the necessary coverage if only certain parts were considered. She argued that the ambiguity of the endorsement provided coverage for the gyrocopter loss.

Click here to see how the courts ruled.

Aircraft policies tend to cover only the aircraft specifically scheduled on a policy. However, many will provide temporary coverage for newly acquired or substitute aircraft in order to give the named insured time to report the acquisition. This coverage must be carefully reviewed though because it is often restricted to similar aircraft. In addition, the time to report is limited.

Click here to read the PF&M Aircraft Insurance Coverage Analysis that includes a discussion of a typical Newly Acquired Aircraft Condition.

Newly acquired, replacement, or substitute unit coverage is a part of many other types of coverage. The ISO Personal Lines auto policy provides an excellent example of how complicated newly acquired vehicle coverage can be. It is particularly important to note that the number of days coverage applies, the types of vehicles that will be covered, and the actual coverage provided can vary significantly.

Click here to review an analysis of the ISO Personal Auto Newly Acquired Auto definition.

ISO offers a Special Auto policy that varies from the standard policy discussed above. It is more restrictive in coverage in many ways, including the newly acquired vehicle definition. While they may look very similar, there is a very significant difference between the two.

Compare the following analysis and the one provided above to see the gap created by moving a client from the standard to the special ISO auto policy.