The “Auto Replacement Cost” Difference

Most auto insurance policies do not cover the cost of a brand-new vehicle after it is declared a total loss. More often, insurance policies cover the actual cash value of the car before it was damaged, then figure in depreciation, condition and other factors. Even if you just bought a brand-new vehicle, once you drive it off the lot, its depreciated value is going to be less than the purchase price. Wouldn’t it be great if you had the option to get a new vehicle?

Gary and I certainly think so!

Several of our companies now offer an optional Replacement Benefits Coverage Endorsement that can be added to your auto insurance policy for a small additional charge. This coverage will pay for a brand-new vehicle that is the same make and model, or similar to your damaged vehicle for up to 3 years from the date of purchase. After its over 3 years old, the damaged vehicle settlement is based on actual cash value plus another 25%, which can be used toward the purchase of a different vehicle.

This endorsement provides a value-added benefit regardless of the age of your vehicle, but there is even more benefit if the coverage is added within the first two years of a brand-new vehicle purchase. Here are some examples of how the Replacement Benefits Coverage works:



Example 1: You bought a brand-new vehicle and insured it with Acuity. The Replacement Benefits Coverage is added to your auto insurance policy. Three years later, you are involved in an accident with the vehicle and it cannot be repaired. Acuity will pay the cost to purchase a similar vehicle manufactured in the current year.
Example 2: You bought a 4-year-old vehicle and added the Replacement Benefits Coverage endorsement. Three years later, you are involved in an accident with the vehicle and it cannot be repaired. your policy will pay the actual value of the vehicle plus 25% more!


The next time you purchase a new vehicle, we will include this valuable coverage, or perhaps the Lease / Loan Gap coverage would be more appropriate, as each situation is different. Including these great coverages will certainly put your mind at ease in the event of a claim, and are just another example of why we say:

Relax…..We’ve got you Covered!





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