Yes, Farmers offers new car replacement insurance, which pays to replace a totaled car with a brand-new vehicle of a similar make and model. Specifically, Farmers’ new car replacement insurance is available if your car is two model years old or newer and has fewer than 24,000 miles. Farmers does not disclose exact costs for its new car replacement insurance, but this type of coverage typically costs about 5% of a policyholder’s premium.
Without new car replacement insurance, Farmers will only reimburse you for your totaled car’s actual cash value (ACV), which is affected by factors like depreciation and physical damage. Because new cars start depreciating almost immediately after purchase, a totaled car’s ACV is usually not enough to pay for a similar replacement vehicle.
If you own a new car or are looking to purchase one soon, new car replacement insurance from Farmers might be a good investment. This coverage is especially worth it if you drive a car that depreciates particularly fast, like a sports car or electric vehicle, or if you can’t afford to pay partially out of pocket for a replacement car in a worst-case scenario.
To learn more, check out WalletHub’s guide to new car replacement insurance.
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