New Car Replacement Insurance Coverage

Ask the Hackrs Insurance
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Given the anxiety and the unanticipated cost that comes with having to replace a vehicle earlier than intended after an accident (especially in this market), who has considered replacement cost
coverage from your - or another - insurer?

This Nerdwallet article is from 2019 so some of the info may be outdated, but it appears to be a good overview of what was available at the time… and should suffice as a jumping-off point for discussion.

How much new-car replacement insurance costs

Pricing varies by driver, vehicle and state, so some companies don’t provide cost details.

https://www.nerdwallet.com/article/insurance/new-car-replacement-car-insurance

“To give a rough idea, Travelers says its new-car replacement coverage … adds about 5% to the price of the policy. So if your Travelers policy costs $100 a month, you’d pay an extra $5 a month to add new-car replacement coverage.”

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I think it’s worth clarifying a few things:

(1) For most companies, the “new car replacement” only applies for first 12-24 months, and no longer applies after the vehicle exceeds that age. It’s not a “you must buy the coverage before vehicle is xx months old” rather “coverage no longer applies”. Some carriers to offer other benefits on 2+ year old cars, for example paying for value of a replacement 1 year newer than your car.

(2) This coverage boosts your actual cash value settlement $$ but given focus of this forum, we should clarify it doesn’t insure your lease terms. For example doesn’t save you from fact that a car that cost $500/mo 2 years ago might go for $800 right now- they are not making you whole with a new lease at same price. I think a lot of people here wish that is the way it worked. :slight_smile:

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Many of us don’t exclusively lease (and I would imagine that’s even more true right now given how awful most lease programs are).

Even before the market went insane, only one of our three vehicles was leased (and that’s about to go to zero :slight_smile: ).

Valid points, though, and nothing I just wrote was intended to contradict any of that. :+1:

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I just bought a new 2022 Lexus NX 350h, and was able to get new car replacement coverage for $2 for a six month period. The coverage is good for one year or 15K miles, whichever comes first.

The company offered it to me when I called to add the car to our insurance. I would not have thought of asking for it. The cost to insure the NX is less than our other car - a 10 year old Camry.

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