• Fri. Dec 8th, 2023

Car Auto Insurance

It's My Car Car Auto Insurance

Is New Car Replacement Insurance Worth It? (2022 Guide)

*Ratings are determined by our editorial review team. Learn more about our scoring methodology below.

#1 Erie Insurance: Affordable for Basic Coverage

Better Business Bureau (BBB) Rating: A+

AM Best Financial Strength Rating: A+

Erie Insurance is known for having low rates and a wide range of discounts. The company’s Erie Auto Plus option features unique benefits such as a $10,000 death benefit, a diminishing deductible and higher limits for certain coverages.

Erie Insurance’s car replacement policy is called Auto Security. The basic Auto Security guidelines, which are applicable to both new and used cars, include the following:

  • For cars totaled less than two years after purchase, you’ll be reimbursed to replace the car with the newest comparable model year.
  • For cars totaled more than two years after purchase, Erie will pay to replace it with a comparable model that’s two years newer.
  • For leased cars that are totaled, Erie will cover the difference between the cash value of the car and the amount remaining on the lease.

#2 Liberty Mutual: Good Programs for Young Drivers

BBB Rating: A+

AM Best Financial Strength Rating: A

Liberty Mutual offers a variety of add-on policies, one of which is new car replacement insurance. If your vehicle is stolen or totaled within the first year of ownership or 15,000 miles, the company will pay for the cost of a replacement car of the same make and model. For vehicles older than one year, Liberty Mutual offers Better Car Replacement coverage. This covers the cost of a car one model year newer and with 15,000 fewer miles than your totaled vehicle.

Keep reading: Liberty Mutual insurance review

#3 Farmers Insurance: Useful Add-On Coverage Options

BBB Rating: A

AM Best Financial Strength Rating: A

Farmers Insurance holds a reputation for reliable service and features a wide selection of add-on coverage options. Its new car replacement insurance pays to replace a totaled car with a new one of the same make and model. This benefit is available if your vehicle is totaled within the first two model years and 24,000 miles.

Keep reading: Farmers Insurance review

#4 Allstate: Good Usage-Based Discounts

BBB Rating: A+

AM Best Financial Strength Rating: A+

In addition to its range of quality coverage options, Allstate offers a Claim Satisfaction Guarantee. This ensures policyholders are happy with their claims service through the company and highlights Allstates’ dedication to its customers. 

Although the insurer tends to have slightly higher prices on average, it offers a wealth of savings opportunities as well as two different usage-based programs to earn discounts. When it comes to new car replacement insurance, Allstate offers coverage for vehicles two years old and newer, covering the cost of a new car of the same make and model.

Keep reading: Allstate insurance review


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