The financial analysis company, Defaqto, has advised purchasers of new cars that they should check the details of their comprehensive insurance policy to ensure that it provides cover for a "new car replacement."

This advice is especially applicable at the moment with the Car Scrappage Scheme coming to an end this month and the new '10" registrations coming out shortly.

Defaqto commented that many motorists seem to believe that all comprehensive car insurance policies are pretty much the same. However, the analysis company explained that this is not the case as some do not include the "new car replacement" benefit.

Mike Powell from Defaqto explained the benefit: "… 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 warned drivers that even if their policy includes this benefit, they should look out for conditions that the insurer may apply. The majority of policies, for example, only offer this cover for cars that are less than a year old. However, NFU Mutual and Saga will offer cover for cars up to two years old. Also, motorists should check whether the policyholder or their partner has to be the first and only registered owner of the car for cover to be applicable.

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