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What does auto replacement protection cover?
I'm buying a new car and looking at auto insurance quotes. I've seen this coverage with various carriers and I'm wondering what it does. Would this cover your loan so you can start fresh if your car is deemed a total loss? Or does it replace your vehicle?
Emily Maracle · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“
Car insurance
carriers often have various names for similar types of coverage. Auto replacement protection is similar to new car replacement coverage
. With this type of coverage, if your new car meets the requirements, your insurance company will pay to replace it with a comparable vehicle if it’s deemed a total loss.
Gap insurance covers the difference between what you owe on your loan and the actual cash value of your vehicle. If your vehicle is deemed a total loss, gap insurance will cover any amount left over after the insurance payout.
Gap insurance typically lasts for the length of your loan, while new car replacement coverage only lasts for one or two years. You’ll have to look at your specific situation to figure out which coverage is best.
“
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