Posted on 04 Aug 09
Consumers participating in the federal government’s “Cash for Clunkers” program will need to provide proof of continuous insurance coverage for one year on the vehicle they are replacing, and insurers are prepared to help policyholders with insurance documentation so they can take advantage of the program, according to the Property Casualty Insurers Association of America (PCI).
The Car Allowance Rebate System (CARS), or “Cash for Clunkers,” is a $1 billion government program designed to help consumers buy or lease a more environmentally friendly vehicle from a participating dealer when they trade in a less fuel-efficient car or truck. Subject to eligibility requirements, consumers can receive a $3,500 or $4,500 discount from the car dealer when they trade in their old vehicle and purchase or lease a new one.
According to the National Highway Traffic Safety Administration’s (NHTSA) final requirements for the program, proof of continuous insurance for a one-year period must be submitted with a dealer’s application for the funds. Insurance cards, declarations pages that meet certain criteria, or a letter from the insurer on company letterhead can satisfy the requirement.
“Insurers are prepared to answer consumers’ insurance questions about the program and help them track down the appropriate documentation if they need assistance,” said Robert Passmore, PCI senior director of personal lines.
PCI collaborated with NHTSA and the insurance industry as the program’s insurance requirements were being developed. “We appreciated NHTSA’s efforts to reach out to the insurance industry as they worked to develop the most efficient process for providing proof of coverage,” said Passmore. “Insurers are pleased to be able to assist consumers participating in this valuable program.”