Policy Exclusions - Replacement
Cars
Most but by no means all motor insurers have a
replacement car clause in their loss/damage section. Usually
they will supply you with a new car if yours is damaged to
an extent of 50% or 60% of its value, or if is stolen. You
must have owned the car from new, with no previous
registered keepers, and it must be less than 12 months old
when the claim event happens. A new car will only be
supplied if the same model and specification is
available.
This is a brilliant clause for all who own a
new car and for the insurers as well. If you are thinking of
buying a new car, check out your policy carefully to make sure
it has this clause. If not find another insurer. Many new cars
these days are sold with 'free' insurance. Check out carefully
if it provides the cover you require. You might be better of
with your current insurer, paying a premium.
I really do not understand those insurers who
fail to put it in their policy. It gives the insured a valuable
benefit - those that don't have it lose sales - and the insurer
can often make savings on claims. Owing to the purchasing power
of motor insurers and their connections in the motor trade,
they can usually buy new cars for a lot less than you or I. So
it is sometimes cheaper for them to supply a new car than to
pay you a fair 'market value' on a car just a few weeks old.
Outstanding finance is not usually a problem. The loan company
will substitute the new car on the agreement for the old
car.
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"On approach to the traffic lights the car in front
suddenly broke." |
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Extracts taken from actual claim
forms submitted to
a number of UK car insurance companies |
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