With Allstate’s new car replacement insurance, your policy will cover the full purchase price of a new vehicle of the same or similar make/model if your current one is totaled. It’s available for cars two years old and newer.
New car replacement insurance from Allstate will help you cover a new vehicle purchase if yours is totaled—without accounting for its depreciated value.
To be eligible for new car replacement, vehicles must be two model years old or newer, and the policyholder must be the original owner of the vehicle.
If you’re planning to insure a new vehicle with Allstate, repair provision coverage and gap insurance coverage are also worth considering.
If your vehicle is two years old or newer, Allstate new car replacement insurance covers the complete cost of replacing your vehicle with a new one if it ends up totaled. It’s an optional add-on, but it could potentially save you thousands in the event that you need to use it.
You need to have collision coverage and comprehensive coverage on your policy in order to add new car replacement insurance.
Without new car replacement insurance, if you total your car, your insurer will only pay up to the actual cash value of the vehicle minus the deductible. Because of depreciation, the actual cash value will be noticeably lower than the amount you paid for your car originally.
With new car replacement insurance, your insurer will cover the entire replacement cost minus the deductible, not just the depreciated value.
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How does a payout with Allstate new car replacement insurance work?
With new car replacement coverage, the loss of your dream car could sting a lot less, because the payout you receive would be based on what it would cost to buy a new vehicle of the same or a similar make and model.
The payout you’d receive under comprehensive/collision coverage without new car replacement insurance would be based on your car’s actual cash value (ACV), minus your policy’s deductible.
A new vehicle can lose up to 11% of its value once you leave the dealership lot and as much as 20% to 30% of its original value in its first year. By year five, many cars will have lost approximately 60% of their initial value.
Let’s say you decided to splurge on an upper-tier trim level of your dream crossover SUV and it was worth $45,000 when you purchased it new. A year into its life, it ends up a total loss in an accident.
You learn that by this time, your vehicle depreciated by 20%—which would come out to a $9,000 loss.
With new car replacement insurance, Allstate would cover the cost of replacing your crossover with a new vehicle of the same or a similar make/model regardless of the current depreciated value.
What happens if you total your car with Allstate insurance?
If your vehicle is damaged after an accident or another unexpected event, you’ll first need to file an auto insurance claim.
From here, your insurer will evaluate the condition of your vehicle, the value of the car, and its repair costs to determine whether your vehicle is a total loss. It’s worth noting that different states will have different thresholds for what classifies as a totaled vehicle.
Determining your car’s ACV will also be based on different factors, such as its age, mileage, and condition.
If you have new car replacement coverage and your vehicle is deemed a total loss, you’ll generally have two options, which might be subject to availability at the time:
Get an identical vehicle that’s the same make and model with the same equipment
Get a vehicle that’s a similar model or of comparable value
How much does Allstate new car replacement insurance cost?
The cost of new car replacement insurance might vary depending on factors like your provider and your location, but you can generally expect it to add somewhere around 5% to the cost of your premium. If your annual premium was $2,000, that would come out to an additional $100.
To find out exactly how much an insurance policy with new car replacement would cost for you, you can request a quote from Allstate. And if you want to save, look into car insurance discounts available from Allstate, including:
Safe driver discount
Multi-policy discounts, including for homeowners and renters insurance
Drivewise telematics program
Is Allstate new car replacement insurance worth it?
For several hundred dollars or less, Allstate’s new car replacement coverage could potentially save you thousands during your first few years of new car ownership if you were to total your car.
Before buying a vehicle, do some research on how quickly the model tends to depreciate. If your vehicle of choice does so more quickly than average, new car replacement may be especially beneficial.
You may feel less compelled to purchase new car replacement insurance with Allstate if your vehicle is new but has a low value and a slower depreciation rate.
What other Allstate insurance coverage options are good for new cars?
In addition to new car replacement, here are a few additional coverages worth considering from Allstate for a brand-new car:
Repair provision coverage:Not all losses are total losses, but that doesn’t make them easy to pay for. Allstate’s repair provision coverage can help with repair costs after partial losses based on their replacement costs—up to your applicable coverage limit.
: Short for “guaranteed asset protection,” this covers the difference between your vehicle’s ACV and the balance on your car loan or lease if it is totaled. With this protection, you won’t have to worry about paying back a lender for a car you can’t even drive anymore.
Which car insurance companies offer new car replacement insurance?
If you’re looking for new car replacement coverage, Allstate is far from your only option. These major insurance providers also have their own form of new car replacement insurance, each with their own eligibility requirements:
In fact, if having cheap car insurance is a priority for you, it’s a good idea to seek out car insurance quotes from at least several providers so you can compare your options.
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