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What do accident forgiveness and new car replacement coverage mean on an insurance policy?
I’ve heard accident forgiveness and new car replacement coverage would be great add-ons to an insurance policy. But I don't understand what they cover or how to qualify.
Emily Maracle · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“Accident forgiveness and new car replacement are two separate coverages and optional add-ons to an insurance policy.
Accident forgiveness
usually means that if you get into an at-fault accident for the first time, it won’t negatively impact your rate with your existing carrier. It’s usually only available to people with a clean driving record for the past three to five years.Not all states allow accident forgiveness, though. So double-check what’s available in your state prior to purchasing accident forgiveness.
New car replacement coverage
will ensure you receive enough money to buy a car of a similar make and model if your previous vehicle is totaled. Typically, it’s only valid for the first year or two of ownership and only applies if your vehicle is under a certain mileage limit.If you’re interested in adding these coverages to your policy, why not also look for cheaper insurance rates using the
Jerry
app! Jerry can collect quotes from up to 50 top insurance companies in seconds and even help cancel your old policy once you’ve made your pick.”View full answer
- Gregory R.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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