Compare new car replacement insurance and if it's worth it | finder.com
man driving a newly replaced car

New car replacement insurance

We value our editorial independence, basing our comparison results, content and reviews on objective analysis without bias. But we may receive compensation when you click links on our site. Learn more about how we make money from our partners.

With this coverage, you could be due a brand-new vehicle after a theft or write-off.

A shiny new car straight from the showroom floor can be an attractive target for thieves. Fortunately, if you have comprehensive car insurance, you could be entitled to a brand-new replacement if your car is written off or stolen within months of becoming yours.

What is new car replacement?

New car replacement is a type of coverage that’s included with some comprehensive coverage policies. If yours doesn’t include it, it’s also available as a policy add-on.

Under most policies for new car replacement, if your brand-new vehicle is stolen or declared a total loss, it’s replaced with another new vehicle of the same make and model. Unlike standard comprehensive coverage that pays to repair or replace your vehicle, new car replacement also covers the cost of car depreciation.

Compare insurers that offer this perk on your policy or comprehensive coverage for free or an extra fee.

Find the cheapest rates

Compare the best car insurance companies near you.

Your information is secure.

When am I eligible for new car replacement?

Eligibility will vary slightly by insurer, but expect to meet basic requirements:

  • You must be the first registered owner of the car.
  • You may be eligible if the vehicle was a registered dealer demo.
  • If you purchased your vehicle with a car loan, your lender may need to give permission replacement.
  • Your car must meet your insurer’s age and mileage restrictions.
  • Your car must be damaged enough to need a replacement, rather than repairs.
  • If stolen, your car must be declared a total loss or nonrecovery within your insurer’s required timing — for example, within 14 days of the date it was stolen.

What happens after my car is replaced?

The process varies by insurer. In some cases, your insurance company transfers your policy to the new vehicle. With others, your coverage ends and you must obtain a new policy for your replacement car. Carefully read your policy’s terms and conditions to avoid any surprises down the road.

In most cases, your vehicle is replaced with one that’s as close to your current model as possible:

  • Same make, model and series. The replacement car will be like the current version of the car you insured.
  • Accessories and modifications included. If you loaded your new car with expensive optional extras, most insurers agree to provide you with a replacement vehicle that has the same modifications.

Compare new car replacement coverage

Name Product Roadside assistance New car protection Available states
Allstate
Included free
Yes, cars under 2 years old
All 50 states
Enjoy having your own dedicated agent to help you get the best discounts and coverage.
Liberty Mutual
Optional
Yes, cars under 1 year old & 15,000 miles
All 50 states
Car insurance through Liberty Mutual will give coverage options for almost any situation.
Root
Optional
No
AZ, AR, DE, IL, IN, IA, KY, LA, MD, MI, MS, MT, NM, ND, OH, OK, OR, PA, TX, UT
Root offers simple, affordable insurance that’s ideal for good drivers. Try the Root app for 2 weeks and see how much you could save. Available in 20 states.
Esurance
Optional
Yes, cars under 1 year old & 15,000 miles
All states except AK, DE, HI, MT, NH, VT, WY
Esurance offers a modern online and mobile experience that helps you take your insurance on the go. Available in 42 states.
Metromile
Optional
Yes, cars under 1 year old & 15,000 miles
CA, IL, NJ, OR, PA, VA, WA
Drive less than 30 miles a day? Save on the coverage you need with pay-per-mile insurance from Metromile. Get a low monthly rate then pay just a few cents per mile. Available in CA, IL, NJ, OR, PA, VA and WA.
USAA
Optional
No
All 50 states
USAA offers affordable car insurance with highly rated customer service to millions of military members and their families. Only available to military members, veterans and affiliated military members.

Compare up to 4 providers

What are the limitations of new car replacement insurance?

Here too, limitations vary by insurer. But you’ll likely need to meet further requirements that relate to your car, your policy and how it was damaged beyond repair:

  • As soon as your car passes your insurer’s mileage or age threshold, your insured value plummets, and the replacement car you receive won’t be worth as much as when you bought your new car.
  • Your insurer might say its unable to find a similar replacement car. In that case, you can search for a replacement vehicle yourself — and your insurer must honor it.
  • You might not be covered for extended warranties you purchased for the original vehicle.
  • A basic deductible often applies, but some insurers waive it if your car is written off in an accident you aren’t at fault for.
  • Some insurers stipulate a maximum weight limit for the vehicle to be eligible for new car replacement.
  • Fires, floods, theft and larceny may not be covered.

What are the alternatives to new car replacement?

If you’ve grown attached to your car and want to be sure you can drive it — or one like it — for as long as you can, you’ve got options when it comes to protecting it:

  • Agreed-value car insurance. Even if your car isn’t yet two years old, you might not be eligible for new car replacement if you aren’t the first registered owner. However, you can estimate how much a new replacement vehicle will cost and negotiate an agreed value to cover it with your insurer.
  • Better car replacement. Some providers offer better car replacement, which replaces your current vehicle with a newer model that has less mileage.
  • Gap insurance. After an accident or theft, your insurance policy might not cover the full value of your vehicle — a problem when you’re still paying off a loan and you’re left repaying on a vehicle you can’t drive. Gap insurance is designed to cover the gap between your payout and payments if your car is stolen or damaged beyond repair.

Find the cheapest rates

Compare the best car insurance companies near you.

Your information is secure.

Bottom line

Combining your liability protection policy with collision and comprehensive insurance can help improve your coverage, but may not fully cover the cost to replace your vehicle. New car replacement insurance is a type of coverage that pays to replace your vehicle after a total loss, including the cost of depreciation. So instead of getting a vaguely similar vehicle, you’ll get the same make and model. Get quotes from multiple providers to find a policy that can cover your new vehicle, then compare your options to get the best value.

Picture: Shutterstock

William Eve

Will is a personal finance writer for finder specialising in content on insurance. While he cannot give personal advice to clients, Will enjoys explaining the intricacies of different types of protective cover to help individuals and businesses find affordable cover that won't leave them underinsured.

Was this content helpful to you? No  Yes

Ask an Expert

You are about to post a question on finder.com:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Privacy and Cookies Policy and Terms of Use.
Go to site