Car insurance is a requirement to drive a car in the state of Florida and across the country.
If you are driving a newer car, chances are that you have collision coverage to replace your car should it ever be totaled in an accident. But this coverage may often be insufficient to replace your vehicle to your satisfaction. New car replacement insurance may be a viable alternative to protect your car.
Collision Coverage vs. New Car Replacement Insurance
Your collision coverage will most often reimburse you for the current value of your car. But as we know, cars lose a large portion – up to 20% of their value – as soon as they drive off the lot. Therefore, if your new $50,000 truck is totaled within a few days, you may only see $40,000 as an insurance payout. This makes it difficult for people to replace their vehicle, especially if they were still paying off the totaled vehicle. Either way, getting reimbursed for the full amount that you paid for the car is close to impossible.
New car replacement insurance is a relatively new product for most insurance companies, and should be considered for those who have a newer car. The difference between this insurance coverage and traditional collision insurance is that new car replacement insurance will allow you to replace your vehicle with the same make and model – as well as the same model year. The only out of pocket for the insured is the deductible. Although not all insurance companies offer this coverage, if you are planning on purchasing a brand new car off the lot, it may be worth looking into those that do.
New car replacement insurance is generally more expensive than traditional car insurance, and most major insurers will require that you carry collision and comprehensive insurance as well. In most cases, you will only be able to get this coverage if your car is 2 years old or newer.
What is Better Car Replacement?
Another option for you may be “better car replacement”. Better car replacement will allow you to purchase a car which is one year newer, and has 15,000 less miles, than the car that was totaled. For instance, if your 2010 Toyota Camry was totaled, you should be able to replace it with a 2011 Toyota Camry. Therefore although you may not be able to replace your car with a new car, you can be assured that you will be given a “better” replacement.
What Car Insurance is Required in Florida?
Although it may be of great benefit to you, new car replacement insurance is not a requirement to drive your new car off the lot. However, you will need to have a minimum of car insurance in place according to state law:
Florida is a no-fault insurance state. The minimum limits for Florida car insurance coverage are:
- $10,000 of no-fault or personal injury protection (PIP) insurance: This coverage will take care of your part of any medical expenses and income loss that result from a car accident. Your children, passengers, and pedestrians you may hit are also generally covered under this policy.
- $10,000 of property damage liability (PDL) insurance: This coverage will protect you and provide for damages you cause in a car accident to someone else’s property, such as homes or buildings.
Anderson and Associates Insurance Group is well versed in all of the different insurance coverages and policies available to Sarasota and Bradenton area drivers. Call us today to discuss your current coverage, as well as if new car replacement insurance is the right choice for you.
