However, for new vehicles, insurance companies will often offer an option for replacement cost coverage. With replacement cost coverage, if your vehicle is totaled within the first year or two, they will reimburse you to get another vehicle of comparable material, style, and quality.
As new vehicles depreciate quickly, replacement cost coverage ensures you’re not going to lose the value of your new vehicle in the event of an accident.
Not every insurance company offers replacement cost coverage. Those that do may have different terms and conditions, so it’s important to read over the policy to fully understand what may or may not be covered.
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