Repair or Replacement:

Protecting the investment in a new car – drive away “new” after a total loss.
New cars aren’t only expensive, they depreciate rapidly. Instead of getting the usual “Actual Cash Value” after an accident, (the original purchase price minus depreciation, or the “book” value of the car) this optional coverage pays without considering depreciation in the value of the car. The only exceptions involve cars that are damaged by fire, theft, or vandalism, which are covered for actual cash value.

How it works...

Example: You buy a new car for $22,000 and two years later you have a total loss. The book value is $17,000 (reflecting the two years of depreciation).  Traditional insurance will pay you the $17,000 less your deductible. With Replacement Cost Auto you would receive the cost of a new vehicle, which with inflation could be $22,000 or more.

If your car is damaged but not totaled, this coverage pays for the cost of repairing your car.