Daily Insurance Industry News
 
 
Daily Insurance Industry News
Monday 16th of July 2018
March 24, 2010

New car buyers must check replacement cover

by Gill Montia

Story link: New car buyers must check replacement cover

New car buyers must check replacement cover

With the Car Scrappage Scheme ending this month and the imminent release of the new “10” registrations, the final weeks of March could see a rush of new car sales.

Defaqto is therefore warning consumers to check out the cover provided under their comprehensive car insurance.

According to the financial analyst, motorists perceive comprehensive policies to be roughly the same, however, some don’t include “new car replacement”.

Defaqto insight analyst, Mike Powell, explains: “This benefit means that if your new car is damaged and the cost of repair is above a certain percentage (typically 60%) of its UK list price, or it is stolen and not recovered, then your insurance provider will replace it with a brand new car”.

He goes on to warn that there are a number of conditions to look out for.

For example, most policies will only provide cover for cars up to 12 months old, or state that the policyholder or their partner must be the first and only registered owner of the car in order for cover to apply.

This means that if the car has been pre-registered in the name of the manufacturer or dealer, “new car replacement” may not apply.

Furthermore, 10% of policies that include the cover apply a 50% cost of repair threshold and 82% apply a 60% threshold.

According to Defaqto, only two insurers (NFU Mutual and Saga) provide the cover for cars less than two years old with the rest of the market providing cover for cars less than one year old.

 

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