Have you ever heard the expression: “A car is a bad investment”? This is generally true because your car begins to depreciate in value as soon as you drive it.
My post of September 4, 2011 discussed the various settlement options commonly found in insurance policies. Auto insurance policies usually pay physical damage claims to your auto on the Actual Cash Value basis. This means the depreciated value of your auto is considered when determining its value.
Erie Insurance has a coverage available to brand new cars not previously titled called New Auto Security Coverage. When this coverage is purchased on your brand new auto and that auto is totalled in a covered loss Erie Insurance will replace your auto with another new auto of the same make, model and equipment. This means that instead of being paid Actual Cash Value for your auto you are paid Replacement Cost. This coverage applies to autos that are two years old or less.
Next time you purchase a brand new auto I suggest you add New Auto Security Coverage to your auto insurance policy. The small premium cost may well be worth it.