Insurance Glossary

New Car Replacement Coverage

Auto

Definition

Auto insurance coverage that pays to replace your totaled vehicle with a brand new car of the same make and model, rather than paying actual cash value.

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Related Terms

Gap Insurance
Auto insurance coverage that pays the difference between what you owe on your car loan or lease and the vehicle's actual cash value if it's totaled or stolen.
Replacement Cost
The cost to replace damaged or destroyed property with new property of similar kind and quality, without deduction for depreciation.
Collision Coverage
Insurance coverage that pays for damage to your vehicle resulting from a collision with another vehicle or object.
Comprehensive Coverage
Insurance coverage for damage to your vehicle from causes other than collision, such as theft, vandalism, fire, weather events, or hitting an animal.
Coverage
The scope of protection provided under an insurance policy, including the types of losses and risks that are covered.
Liability Coverage
Insurance that covers legal responsibility for injuries or damage caused to others or their property.
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