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Vehicle replacement insurance in BC

As we all know, newly purchased vehicles depreciate quickly. And when your vehicle is totaled, meaning the extent of the damage is so bad that your insurance provider considers it a total loss, our New Car Replacement insurance product will pay to replace your vehicle with a similar one, while protecting you from depreciation or inflationary gaps. 

With a New Car or Better Car Replacement insurance policy, you get peace of mind knowing you have coverage in place that will do far more than replace your written-off vehicle with an older model of lesser value.

How does New Car Replacement Insurance work?

New Car Replacement insurance is an optional coverage designed to complement your comprehensive auto insurance policy. Without proper insurance coverage, an accident can end up costing you more than you might anticipate, even if you are not at fault. The financial gap in your collision and comprehensive insurance could be significant. Your insurer will pay you what’s called “Actual Cash Value” for your vehicle. In most cases, your vehicle’s actual cash value is significantly lower than what you originally paid for it.

Statistics show that simply driving a new car off the lot depreciates it by as much as 11%, and depreciation accelerates to 20% by the end of the first year. For example, you’ve purchased a brand-new vehicle, a 2021 Toyota valued at $40,000. After only a few days of driving it, you get into an accident that writes-off your new car. At the time of the accident, even though your car is only a few weeks old, its value has already depreciated to $36,000, leaving you with a $4,000 shortfall from what you paid for it.

With New Car Replacement insurance, you’ll be reimbursed for a new model of the same vehicle, not just $36,000. If you didn’t have New Car Replacement insurance, you would have to absorb the difference if you want to buy another brand-new vehicle of the same model. 

Here are a few additional details to help you understand New Car Replacement insurance: 

  • Coverage is available as long as you have collision and comprehensive insurance. Your basic ICBC auto insurance does not automatically include collision and comprehensive coverage. 
  • Your vehicle must meet age and brand requirements to qualify. Your car is eligible for New Car Replacement coverage if it was made before a certain year and meets the make/model requirements.
  • We offer Better Car Replacement insurance. With this variation of New Car Replacement insurance, you may get reimbursed with a newer or better model of your car.

Key Features of New Car Replacement Insurance

InsureBC offers industry-leading New Car Replacement insurance that protects you and your vehicle.

eligibility

Unique Eligibility Criteria

Purchase our product for any vehicle that is 5 years old or newer, regardless of its mileage. Yes, you may qualify even if you’ve been denied by other insurance companies.

loss protection

Enhanced Total Loss Protection

We will pay the difference between the Actual Cash Value settlement you receive from your primary insurer and the cost of the brand new current model year vehicle the same as what you had previously. 

deductible reimbursement

Unlimited Partial Loss Deductible Reimbursement

Increase your collision and comprehensive deductibles with your primary insurer and we will reimburse you for any deductible paid to your primary insurer, saving you money on your primary premium.

flexible terms

Flexible Coverage Terms

Choose the coverage term to fit your needs. With our multi-year policies, your coverage is available for up to 7 years. Pay by credit card or have EFT withdrawals directly from your bank account—whichever you prefer. 

optional add-ons

Superior Optional Add Ons

Original equipment manufacturer (OEM) parts, Diminished Value and Plus Packages are available as optional add-ons. Simply add these to your policy for added protection.

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Understand your auto insurance coverage options

If you drive a car in BC, it is mandatory to obtain car insurance from ICBC. But did you know the difference between mandatory and optional car insurance coverage? Knowing you have the right coverage in place allows you to drive worry-free. We’ve broken down some common coverages to help make sense of it all. 

Coverage Real-life example Basic Optional add-on
Accident Benefits You’re hurt in a car accident and got some bad injuries. This will help cover your medical costs, including physiotherapy and prescriptions.
Third-Party Liability You’re at fault in a collision where someone hurts their leg. This can help cover their injury costs and vehicle damage. ($200,000)
New Car Replacement You total your car just one month after getting it. We’ll help you get a new one with this coverage.
Better Car Replacement You total your car just one month after getting it. We’ll help you get a newer or better one with this coverage.
Collision Your car’s damaged in an accident with another vehicle or object. This will help repair or replace your vehicle even if you’re at fault.
Comprehensive Your car’s damaged or stolen in an accident that’s not a collision. This will help pay to replace or repair your vehicle.
Loss of Use Your car’s being fixed from an accident and you need a car for work or school. This will help cover your expenses to rent a car, use taxis and take public transit.
Specified Perils Your car’s damaged or stolen in an accident that’s not a collision. Similar to comprehensive coverage, this will help pay to replace or repair your vehicle but has a shorter list of damages it covers.
Extended Third-Party Liability You’re at fault in a collision where someone gets hurt. In addition to your basic third party liability, this will help cover costs of a crash that’s higher than what the standard coverage can cover.
Extension Underinsured Motorist Protection You’re in a collision where the policy covering the at-fault driver has insufficient coverage. This can help increase your protection, such as medical costs, rehabilitation and lost wages.

Is New Car Replacement Insurance Worth It?

You purchased a new vehicle

Because your new vehicle depreciates as soon as you drive off the lot, this coverage is an affordable way to retain the value of your car should you get into an accident and total the vehicle, protecting your financial interest.

You don’t incur too much cost

Adding New Car Replacement coverage to your policy is more affordable than you may think.

You minimize your financial strain

If something happens to your new vehicle causing it to be written-off, you’ll be compensated for inflation and depreciation.

You have peace of mind

You won’t have to worry about what would happen if your new car was totaled in an accident.

Tips for Buying New Car Replacement Insurance

Understand the cost of New Car Replacement insurance

The cost of new vehicle replacement insurance varies by insurance company. Our New Car Replacement insurance is priced competitively and gives you affordable coverage. While costs vary, most of our customers pay significantly less than what they would have paid with competing providers, such as ICBC.

Find out the value of your vehicle after depreciation

Find out the value of your vehicle after depreciation so you have an idea of the difference between how much your primary insurer would pay out and what you would be responsible to pay out of your own pocket. 

Think about the likelihood of your vehicle being totaled

Typically, a vehicle is considered written-off when it would cost more to repair it than what the vehicle is worth. While you hope it will never happen to you, there may come a day that your vehicle is involved in a collision and is beyond repair. If it were to happen, you should understand the impact it will have on you and your potential insurance payout. 

Check your ability to afford a new vehicle

It’s important to check your financial situation in the event that your car is totaled. How much will you need to pay out of your pocket, and can you afford to do so?

why-you-need-auto-insurance
WE'RE-HERE-FOR-YOU-ILLUSTRATION

Why Choose InsureBC?

Independent Broker Group 

As one of BC’s largest independent insurance brokers, we can access all private auto insurance companies to obtain coverage options for you and provide you with the best value out there.

Coverage That Fits

We are a one-stop-shop for all your insurance needs and provide you with insurance solutions that cover all the essential items in a customized manner for your unique needs.

Always Here for You

With 90 locations across the province and through an online platform, we assist more than 600,000 satisfied customers annually.

Frequently Asked Questions for New Car Replacement Insurance

Below are a few answers to frequently asked questions about ourcar replacement insurance.

Yes! Nowadays, most leasing companies will build GAP insurance into their contracts, but most people don’t realize that GAP is more designed to protect the Lessor as opposed to the Lessee. In the event of a Total Loss, GAP insurance will make up the difference between what a person owes on their leasing contract and the vehicle’s actual cash value.

This leaves the Lessee with no vehicle, and nothing to put towards a new one. Our New Car Replacement policy would pay the Insured the difference between the actual cash value settlement that the Lessor received for the loss vehicle, and the cost of the brand new model year, which can then be applied as a down payment towards a new lease or financing contract for a replacement vehicle.
No, after a total loss you are not required to buy the same vehicle as you had previously. You are more than welcome to choose a different or better vehicle if you’d like, but we will only pay up to the replacement value of the same make, model, and trim package as the vehicle that you had previously. It will be in the most current model year.
In the event your vehicle is deemed a total loss, our New Car Replacement policy will pay the difference between the Actual Cash Value settlement received from your Primary Insurer, and the MSRP value of the same replacement vehicle as what you had, but in the newest model year available from the manufacturer.

On the other hand, our Better Car Replacement insurance policy will pay the difference between the Actual Cash Value settlement received from your primary Insurer, and you’re locked in the purchase price, plus add 5% indexation per year, up to a maximum of 20%. This “Limited Depreciation” coverage ensures that you can get back into a “Better Car” than what you had previously.
Yes! If you purchase a new vehicle while mid-term in your current policy, we can process a transfer of the policy to your new vehicle. This will generate a new policy, with a new policy number, effective and expiry date. Any unused portion of the premium for your previous policy can be applied to the new insurance premium as transfer credit.
Yes! If you transfer ownership to any of your immediate family members mid-term, your policy can be transferred to the new owner. The recipient of your vehicle would keep the same policy number, effective and expiry date.
The difference between New Car Replacement and GAP Insurance is this: GAP Insurance only pays the difference between what a person owes on their leasing contract and the vehicle’s actual cash value at the time of the loss. This means that you don’t owe anything for that vehicle but also aren’t left with anything to put towards a new one.

A New Car Replacement policy pays the difference between the Actual Cash Value settlement received by the Lessor from the Primary Insurer, and the cost of the same make, model, and trim level vehicle, in the newest model year available. The New Car Replacement policy settlement can then be applied to a new lease or finance contract as a down payment towards the replacement vehicle.
Our unique eligibility guidelines allow for any vehicle that is 5 years old or newer to qualify for New Car Replacement coverage. That means you are not required to have just recently purchased your vehicle to qualify and can purchase a policy any time between your vehicle being brand new, and 5 model years old. There is also no kilometre restriction, just as long as your vehicle has not been driven on average more than 40,000 km a year since it was new.
All claims are processed in-house by our dedicated Optional Auto Division, Drivesure, and can be submitted in a number of different ways. You can submit your claim via an online submission form located on our website, through your issuing insurance agent or broker, or by contacting our auto department directly at 1-888-480-6641. Documents can be submitted via email or fax, and claims are processed within 1-2 business days of receiving all documentation.

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