LOS ANGELES, Oct. 27, 2021 /PRNewswire-PRWeb/ — Compare-autoinsurance.org has launched a new blog post that presents important information drivers should know about new car replacement insurance.
For more info and free car insurance quotes online, visit https://compare-autoinsurance.org/everything-drivers-need-to-know-about-new-car-replacement-insurance/
Whenever drivers take their cars on the road, there’s always the possibility of an accident, and in some cases the possibility to lose the vehicle. A totaled vehicle can cause disruption and inconvenience in the life of a driver. Usually, insurance companies offer a measure of protection to safeguard the driver’s financial investment. However, there is additional coverage drivers can get to close any potential financial gaps if their vehicles are totaled and need to be replaced. New car replacement insurance is an optional coverage that can help drivers that totaled their cars.
Drivers looking to obtain new car replacement insurance should consider the following
- What is new car replacement insurance. This type of optional coverage allows drivers to replace a vehicle that has been totaled. It pays the cost of a new car of the same make and model that the driver just lost, minus a deductible. Usually, in the event of a total loss, insurance companies will only provide the driver with the actual cash value of the lost vehicle, which is lower than the price paid for a new vehicle. A new car replacement insurance will lessen the financial burden of getting a new car after suffering a total loss.
- Why new car replacement insurance is useful. This type of coverage is useful because of the depreciation of cars. In most cases, it’s estimated that vehicles lose over 10 percent of their value within the first few months of ownership and over 20 percent within the first 12 months.
- What are the requirements to get one. This coverage only applies to newer cars. Depending on the insurance providers, the cars must be of a certain age and have a certain mileage. Also, the driver must have comprehension and collision coverage.
- How it differs from GAP insurance. Many people confuse new car replacement insurance with GAP insurance. However, they are two different coverages. GAP insurance is used to close the gap on a loan or lease obligations. New car replacement insurance helps drivers buy a new car, while GAP insurance helps drivers pay off their totaled car. GAP insurance will make up the difference between the actual cash value of the totaled car and what the driver owes.
- Who offers new car replacement insurance. Not all insurance companies offer this optional coverage. Among the providers that do offer new car replacement insurance are Allstate, Ameriprise Financial, Farmers Insurance, Liberty Mutual, MetLife, Nationwide, Travelers Insurance, and The Hartford.
- It is worth getting new car replacement insurance. In most cases, this option costs 5% of the annual premium. Before getting this option, drivers should consider things such as their personal risk, how much they are driving, their neighborhood, how likely are to be involved in a car accident that can total their cars, if they can afford to buy a new car with the actual cash value they will receive, and their ability to pay for this coverage.
For additional info, money-saving tips and free car insurance quotes, visit https://compare-autoinsurance.org/
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