New Car Replacement Insurance
Get a quote nowIf you are thinking of purchasing or have purchased a brand-new car, then you might want to get specialised insurance to cover your vehicle
If you have bought a new car then you know there’s nothing more exciting than driving out of the dealer’s room in your state-of-the-art, pristine vehicle. But what if something happens to it a week, month or year after you bought it? New car replacement coverage can protect your car and put your mind at ease.
What is new car replacement insurance?
This kind of insurance is geared towards owners of brand-new cars that have recently been purchased. In the event that your car gets totalled within a set time frame after you purchase it, new car insurance will replace your car with the same make and model for its original purchase price (minus your deductible).
This is useful for owners of new vehicles, as regular accident insurance generally only pays out the market price of the car. This means you have to foot the rest of the bill out of your own pocket to purchase another model, which is not ideal!
How does the process work?
In order to qualify for new car replacement insurance, there are certain conditions that need to be met first. These conditions can vary depending on your insurance provider, but there are a few key conditions that usually always apply:
Coverage is only available to car owners who already own collision and comprehensive insurance - companies that sell new car replacement insurance will generally offer it as an optional add-on to a comprehensive insurance policy. Before you take out insurance on your car, check to see if the policy you are purchasing offers new car replacement insurance.
The car’s damage will have to meet minimum requirements - Your car will need to have received a certain degree of damage in order to qualify for the pay-out. If your car is only mildly or moderately damaged then it’s likely that the insurer won’t deem it in need of replacement, only a repair.
The assessment criteria for evaluating damage will vary depending on your insurer. Some companies will only pay out if the car is deemed a write-off, others are willing to replace the car if it’s estimated that the replacement costs are at least 60% of the car’s purchase value.
Policies often have age limits for cars - In order for cars to qualify as “new” according to the insurance regulations, they will need to meet age requirements. The cap that policies place on a car’s age can vary, with some policies only covering cars during their first 12 months after purchase and others covering up to 36 months. Ensure you know how long your policy will last before buying it.
There may also be mileage limits - In other instances your car’s mileage, instead of its age, may be prioritised in a policy plan. Certain policies don’t look at a car’s age after date of purchase, but rather the mileage it has covered. After you have driven a certain number of miles, your insurer will no longer classify your car as “new”. This can be useful if you have bought a new car but don’t drive very far, or on a daily basis.
These qualifications, and others, will vary depending on the policy. Be sure to compare a range of policies and understand what they offer before buying one.
Who would qualify for new car replacement cover?
Insurance to replace a recently purchased car is not something that every car owner needs to consider. Paying an additional premium to cover your new vehicle is not a necessity, but it can put your mind at ease knowing your car is protected under any circumstance. To find out if you qualify for new car replacement insurance, visit Compare Insurance to quickly and easily compare a diverse range of cover policies online.
In this article
What is new car replacement insurance?
How does the process work?
Who would qualify for new car replacement cover?
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