Best Auto Insurance Companies That Offer New Car Replacement (2021)

Most auto insurance companies that offer new car replacement also require you to have full coverage on your vehicle. While not all insurers offer the coverage, car insurance companies that offer new car replacement have certain conditions that apply related to the age and mileage of your vehicle. Other car insurance companies offer similar coverage, such as GAP insurance, to help you replace a damaged vehicle.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Oct 21, 2021

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Things to Remember

  • New car replacement coverage offers the full cost to have your car replaced
  • Not all auto insurance companies offer new car replacement
  • Drivers can also buy better car replacement and GAP coverages to help pay for a new car

Buying a new car is expensive, but your car’s value starts decreasing the moment you drive it off the lot. You can quickly owe more than your new car is worth, leaving you with a big bill if your car is in an accident.

While not all companies provide the coverage, auto insurance companies that offer new car replacement include some of the best auto insurance companies out there.

Shop around to find the most affordable auto insurance companies that offer new car replacement. Compare rates and coverage from multiple companies to find the best deal.

Enter your ZIP code now to compare free quotes from auto insurance companies that offer new car replacement near you today.

What auto insurance companies offer new car replacement?

What does new car replacement mean? After you buy a car, the value starts going down immediately. The difference between what your new car is worth and the value of a similar new car can be substantial.

New car replacement means that if your car is totaled in an accident, your insurance company will pay the difference between what your car is worth and the cost of replacing it with a new car.

Which insurance companies offer new car replacement?

Top auto insurance companies that offer new car replacement coverage include Allstate, American Family, Farmers, Liberty Mutual, Nationwide, and Travelers.

You can’t get State Farm new car replacement insurance or coverage from GEICO, Progressive, or USAA.

Not all auto insurance companies offer new car replacement, and the ones that do usually require drivers to carry full coverage.

This table shows you average rates from top auto insurance companies based on coverage type. Compare full coverage rates to see what you can expect to pay before you add new car replacement coverage.

Average Annual Auto Insurance Rates By Coverage Type
CompaniesAverage Annual Auto Insurance Rates for High CoverageAverage Annual Auto Insurance Rates for Low CoverageAverage Annual Auto Insurance Rates for Medium Coverage
Allstate$5,139.02$4,628.03$4,896.81
American Family$3,416.40$3,368.49$3,544.37
Farmers$4,494.13$3,922.47$4,166.22
GEICO$3,429.14$3,001.91$3,213.97
Liberty Mutual$6,356.04$5,805.75$6,058.57
Nationwide$3,505.37$3,394.83$3,449.80
Progressive$4,350.96$3,737.13$4,018.46
State Farm$3,454.80$3,055.40$3,269.80
Travelers$4,619.07$4,223.63$4,462.02
USAA$2,667.92$2,404.11$2,539.87

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New car replacement coverage is added to your full coverage insurance. Rates will vary by company but it is generally around 5% of your policy cost.

It’s important to remember that each auto insurance company has its own requirements for new car replacement.

For example, Nationwide new car replacement coverage requires that the car be less than three years old, but Allstate requires the vehicle to be less than two years old.

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What other auto insurance coverages will help replace a car?

Even if an auto insurance company doesn’t offer new car replacement, they will sometimes offer a different type of coverage that will help if your car has to be replaced.

Some companies, such as Liberty Mutual, offer better car replacement. If your vehicle has to be replaced, this coverage will replace it with one that is a model year newer with 15,000 fewer miles.

Most auto insurance companies offer GAP insurance as well. GAP insurance pays the difference between what you owe on your car and what it’s worth.

Most lenders require you to purchase GAP insurance when you buy a new car since the value will decrease rapidly.

The Insurance Information Institute reports that you may have to have GAP insurance if you paid less than 20% as a downpayment, leased your car, or financed for 60 months or longer.

Auto Insurance Companies That Offer New Car Replacement: The Bottom Line

New car replacement is available from some companies, and auto insurance companies that don’t offer new car replacement usually offer another type of coverage to help pay for your replacement.

Shop around to find the best rates from auto insurance companies that offer new car replacement. Each company will offer different rates, so compare multiple companies to find the best deal for you.

Enter your ZIP code now to compare quotes from car insurance companies that offer new car replacement for free in your area.

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Enter your ZIP code below to view companies that have cheap auto insurance rates.

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