When you buy a new car, it starts losing value the moment it leaves the dealership. In the event of a total loss accident or theft, a standard payout might not be enough to replace your vehicle with an equivalent model.
That’s where new car replacement insurance comes in. This coverage allows you to receive the amount needed to replace your car with a brand-new equivalent model, rather than its depreciated value.
With ClicAssure, you can compare in just minutes among the best car insurance offers with new car replacement coverage in Canada and find the one that fits your vehicle, your budget, and your needs.
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The “replacement value” or “new car replacement” coverage is an optional endorsement that you can add to your car insurance policy. It guarantees, for a set period (usually between 3 and 5 years), that your vehicle will be replaced with a new one in the event of a total loss, or that you will receive a payout equivalent to its original purchase price, depending on your insurer’s conditions.
Choosing an insurance policy with new car replacement coverage comes with several advantages:
💡 Good to know: New car replacement coverage is not automatic. It must be added to your insurance policy, usually under the name “replacement cost endorsement” or “replacement insurance.”
This coverage is especially recommended if:
New car replacement coverage is an optional endorsement that allows you to receive the amount needed to replace your vehicle with a new equivalent model, without any deduction for depreciation.
In other words, if your car insurance policy includes a new car replacement endorsement and, for example, after three years you have a total loss accident, your insurer will reimburse you for the car’s original purchase price, not its depreciated value.
This protection generally lasts between 3 and 5 years, depending on the insurer and your agreement. After that period, coverage reverts to the vehicle’s market value.
No, it’s not required by law. It’s an optional protection, but it’s highly recommended for new car owners. However, depending on your lender (dealer, bank, etc.), they may require you to include a new car replacement endorsement in your policy.
No. It only applies in cases of total loss (theft, fire, or non-repairable accident). For partial damages, your collision or comprehensive coverage applies instead.
Yes, in most cases. Insurers require that the vehicle was purchased new, or that it meets certain age or mileage limits at the time the endorsement is added.
New car replacement coverage reimburses the original purchase price of your vehicle. Replacement cost insurance, offered by some dealers or insurers, may instead allow you to replace your car with a newer or higher-value model.
The two types of coverage have different conditions, so it’s important to read your policy carefully to understand the details.
Yes, slightly. Since it offers higher compensation, the premium is generally a bit more expensive, but the added protection is well worth it.
When completing your car insurance quote on ClicAssure, you’ll be asked if you want to include new car replacement coverage.
If you complete your quote over the phone, a ClicAssure-affiliated insurance broker will offer you this option and explain how it works.
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