Liberty Mutual Insurance, USA, New Car Replacement Policy


Liberty Mutual Insurance has a fantastic car replacement policy dubbed “New Car Replacement”, which replaces your old car to a new one.

The policy allows car owners to replace their cars if and only if they have not covered more than 15,000 miles.

Below we describe definition, terms and the process of replacing your old car.

What is New Car Replacement?
Buying a brand new car is a big investment that starts depreciating the minute you drive it off the lot. In the event of a total loss, many insurance policies will give you less than what you paid for it because of this depreciation.

If your totaled car is under one year old and has less than 15,000 miles, New Car Replacement is an optional coverage for your Liberty Mutual Auto Insurance policy that provides you with the money for a brand new car, not just the depreciated value of your old car.


The Benefits of Adding New Car Replacement

  • Get money for a replacement car that’s the same model year as your totaled car.
  • Peace of mind in avoiding the financial loss associated with owing more money on your car than it is worth.
  • Not having to worry about replacing your totaled car with an older model of lesser value.

What is Auto Gap Insurance?
When your car is deemed a total loss and you owe more money on it than it’s assessed to be worth, gap insurance will cover the remaining amount you owe. Gap insurance is generally an optional coverage that you can purchase at the same time as your car. It does not provide coverage for a newer car.

New Car Replacement: A “New Car” Gap Insurance
New Car Replacement goes further than typical gap insurance because you receive payment for a replacement that’s brand new, as long as your totaled car is less than a year old and has fewer than 15,000 miles.

Better Car Replacement vs. New Car Replacement
While there are similarities between these two coverage options from Liberty Mutual, here are the specifics of each:

Coverage Feature Better Car Replacement New Car Replacement
Optional coverage added to auto insurance policy
Previously insured car must be a total loss
Policy deductible applies
A replacement car is provided
Replacement is the same model year as totaled car
Replacement has 15,000 less miles than totaled car
Totaled car must be less than a year old
Totaled car must have less than 15,000 miles on it
Not available for leased cars and motorcycles