If you recently purchased a new vehicle, you should consider adding a new car replacement policy to your insurance plan. This decision will not only ensure that the entire cost of your exact car is covered in the event that it’s damaged or totaled, but also provides you with peace of mind and improved financial security during an emergency event.
Though a few prominent insurance providers do not offer new car replacement policies, including Progressive and Geico, a wide variety of popular and affordable insurance companies do offer it, including Liberty Mutual, Allstate, and AARP.
What is a new car replacement insurance add-on?
If you already have collision and/or comprehensive insurance for your car, you can purchase a new car replacement add-on policy to protect your car from damage in the event it is severely damaged or completely totaled.
Though these insurance policies typically only cover brand new cars (based on a timeline determined by your selected insurance provider), they are a fantastic way to maintain the value of your new car long after its original purchase.
Because car depreciation begins as soon as the car leaves the lot and occurs quite rapidly in comparison to other goods, properly insuring your vehicle can save you thousands of dollars in the event of an accident or emergency. Even if you fully total your car, under a new car replacement insurance policy, the entire cost for an identical vehicle would be entirely covered.
What are the pros and cons of purchasing this type of policy?
Like any insurance add-on, purchasing a new car replacement policy comes with its own set of advantages and disadvantages.
- The cost of any incurred car damage, including totaling, is completely covered
- In the event of an emergency, you can focus on yourself and your surroundings as opposed to focusing on your own potential financial ruin
- New car replacement insurance add-ons are more costly than average policies, so you will be spending more out of pocket each month
- You have to pay your deductible before making a claim and receiving financial reimbursement
Which insurance companies offer new car replacement?
Not all insurances offer new car replacement, but the following providers do: