This optional coverage protects your investment in a new car if an accident results in repair costs exceeding the actual cash value of your car.

Why should I add this coverage to my auto policy?
New cars today are expensive. They also depreciate rapidly. After an accident, traditional auto policies pay based on a car’s actual cash value, which is the original purchase price minus depreciation, or the book value of the car at the time of the accident.

But this coverage option works differently. Losses are paid without considering depreciation in the value of the car. The only exceptions involve cars that are damaged by fire or theft, which are covered for actual cash value. Regardless, your only cost would be your policy deductible.

Example:
You buy a new car for $18,000 and within a year, the book value dropped to $16,000. At the same time, a new car identical to yours costs $20,000. If you are in an accident that totals your car, traditional insurance pays you up to the cash value, or $16,000 minus your deductible. If your car is totaled, replacement cost auto coverage pays you for the cost of replacing the car with a new one, or $20,000 minus your deductible.

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

Because cars depreciate so rapidly, new car owners often receive less from their traditional auto policies than they need to pay off their car loans in the event of a total loss. This optional coverage provides for repairing or replacing your new car without adjustment for depreciation or wear and tear.

What if someone hits me?
If someone else hits you and totals your car, this optional coverage would still protect you. The other driver’s insurance would pay you the actual cash value of your car, and your policy would pay the difference between that and the repair or replacement cost. This optional coverage protects you no matter who is at fault.

What types of cars qualify for replacement cost protection?
All current model year cars with an A title (a title to original owner) or current model year demonstrators are eligible. You have 60 days after you purchase your car to add replacement cost coverage to your auto policy. Ask your agent if your car qualifies.

How long does replacement cost protection last?
Once you purchase the coverage, it continues for the first four consecutive years (five years in North Carolina) that you own your new car. If you discontinue the coverage during that time, you cannot add it back to the policy.

Is replacement cost auto coverage expensive?
No, the coverage is reasonably priced.

Ask your Penn National Insurance agent for a quote. And find out just how easy it is to protect your investment in your new car.

Peace of mind. Knowing that you’re protected, that your family, your home and your cars are properly insured, and that you can sleep easy at night.

With Penn National Insurance and your independent agent, you get outstanding value and superior local, personal service. And if you have a claim, we’ll be there for you. We promise to handle your claim promptly, fairly and courteously.

Peace of mind. You deserve it. Penn National Insurance and your local independent agent provide it.