What Is Replacement Car Insurance Policy?

A new car replacement insurance is a coverage that pays costs for buying brand new vehicle if your existing car gets totaled in an accident. The make and model of the replaced vehicle will be the same as that of your totaled car. Normally, insurers provide this type of insurance cover as an add-on feature if your current policy has comprehensive and collision coverage features.

However, companies may have certain conditions for providing coverage for replacing totalled cars with new ones. A free consultation with a competent local agent or broker service could let you know the qualifying criteria. FreeCarInsuranceQuote.ca can assist you in fixing free consultation with a certified and experienced agent within a span of just minutes online!

How Does New Car Replacement Insurance Work?

  • You can approach your car nearby dealership/garage post-accident to find out if replacement of some parts will suffice or you need to replace your vehicle with a new one.
  • If it is not possible to repair damaged car parts then they can be replaced with new and original parts produced by the car manufacturer.
  • You may be entitled to get partial refund of the deductible amount on your auto insurance policy in such a case.
  • If the car has been totally damaged and cannot be repaired or parts replaced then you can get it replaced with new car. The wrecked car’s depreciation value might not have any impact on the claim payment. But deductible amount will not be refunded.

Here Is Why Buying A car replacement insurance Policy Is A Good Idea

The market worth of new cars can reduce to half within four years. And when a new car is written off because of an accident or collision, insurer will only reimburse money for depreciated amount.

On the other hand, if you look for brand new car to get totalled car replaced, the market price will be much higher as new car values continuously increase by around 2.5% year over year. This means there will be a big gap between depreciated car value and the new car value. The difference will be effectively accounted for by a replacement auto insurance cover.

Explore 2 Reasons To Purchase Full Car Replacement Insurance Cover

There could be two situations wherein the need for replacing car on insurance policy might be felt as mentioned below.

  • Your totaled car is under loan finance or you have leased the vehicle. If the car gets totaled in an accident then you might be required to repay the remaining loan dues. Your auto insurance policy won’t pay the damages.
  • You are unable to pay differential amount between depreciated totalled car value and market price of new car. A replacement insurance cover can reduce your financial worries in such case as it will pay new car costs minus deductible amount.
  • So, you don’t have to worry about spending money on your own and suffer from any kind of financial burden caused by loss of your vehicle. It will be replaced by a new car of the same make and model.

Check Your Eligibility To Buy A Cheap Replacement Car Insurance Now

For buying full replacement value car insurance cover, it could be vital for you to meet the following qualification criteria.

  • You must be primary owner of the car and registration should be in your name.
  • Even registered dealer memo cars are eligible for such type of insurance coverage.
  • If totaled vehicle was under loan finance then lender’s written consent is required.
  • The written-off car should meet age and mileage requirements mandated by insurer.
  • Totaled vehicle should be damaged to such an extent that its replacement is essential.
  • If vehicle has been stolen and is non-recoverable then for getting it replaced, the loss must be notified within insurer’s specified time period.
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Determine If Buying New Car Replacement Insurance Coverage Is Worthwhile

  • Its worth purchasing car insurance replacement car coverage if your vehicle is still quite new, not more than one or two years old. To that effect, you need to first determine whether buying a policy of this kind is relevant for your circumstances. The premium charged for such type of a policy could be easily manageable as well as sustainable.
  • As replacement vehicle insurance covers are inexpensive, it is suggested that you buy such coverage feature. Such a move may give you complete peace of mind especially if your vehicle gets totaled in an accident.
  • Thus, now that you know as to what is car replacement insurance cost, it makes sense to embark upon the right course of action. Our team of specialists can guide you in exploring your options and help you in making an informed decision on your purchase.
  • If your existing car insurance policy has car replacement coverage feature then you may not need to buy it. You need to just make sure by going through the fine print of your policy document before you spend extra money.

Read this bottom line for getting replace your vehicle on insurance policy

It is needless to say that car values depreciate fast and probability of their meeting with an accident is real. Totalling of your still new car can cause collateral damage and unnecessary strain on your finances.

To avoid such type of situation, a car replacement policy can help you in getting the totaled vehicle replaced without paying any money from your pocket. Usually, such kind of coverage may be available for cars that are one or two years old. But to provide coverage, some insurers may require drivers to have comprehensive and collision coverage on their new auto insurance policies.




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