Will I need to change the rot.file to when I add a new continent?

Currently, my reconstruction tree only has two continents loaded in, but I want to add continents after the ones I already have are put into place.

Will I have to replace the .rot file and/or edit it? or does it automatically compensate for the new continents?

You can edit the rotation file (to add a rotation sequence for the plate ID of your new continent if it’s not already in the rotation file).

Tutorial 2.4 Constructing a Plate Model From Scratch might be helpful in this regard.