Important Coverages for New Vehicles

Purchasing a new vehicle is an exciting time. For most people, it is one of the larger purchases that they make in their lifetime! Now that you have your new vehicle, you want to ensure your investment is protected. While standard BC auto insurance covers many of the important items such as liability, collision or comprehensive, it does not offer replacement cost coverage.

There are three types of replacement cost insurance available in British Columbia: New Vehicle Replacement Plus (NVR+), Replacement Cost and Limited Depreciation.

So the question is: What is replacement cost insurance, and why do I need replacement cost insurance for my new car?

Replacement cost insurance, whether through NVR+, replacement cost or limited depreciation, all cover depreciation on your vehicle if written-off due to a claim. Additionally, all three options allow for a choice of an ICBC accredited repair facility with guaranteed repairs if you do need your vehicle fixed due to a claim.

Now, let’s break down the differences between them.

New Vehicle Replacement Plus

New Vehicle Replacement Plus is the ideal coverage if you are purchasing a brand new vehicle within the first two model years and have a claims-rated scale discount of 20% or better. Should you have a claim, this coverage ensures your vehicle will be repaired using new manufacturer parts (where available). If the damage to your vehicle exceeds 50% of its market value, NVR+ allows you to choose your choice of cash settlement or a new vehicle of the same like/make/model. This is a key benefit of this coverage as the other two offerings have significantly higher limits before a vehicle will be written off. An additional benefit of this coverage is that if your vehicle is written off, your deductible will be reimbursed. This is not the case for Replacement cost or limited depreciation coverage.

Replacement Cost Coverage

Replacement Cost Coverage is an alternative coverage option for new vehicles within their first three model years. This coverage can be purchased after NVR+ runs out if you wish to continue to have replacement coverage for the third year, or can be purchased if you’re ineligible for NVR+. Replacement cost covers you for depreciation, repairs using new manufacturer parts, and choice of settlement options should your vehicle be written off. It is important to note that a vehicle would require significantly more damage to be written off with this coverage.

Limited Depreciation

Limited Depreciation is the third coverage available for new vehicles and is available for purchase during a vehicle’s first three model years. This coverage is also available to those who may be ineligible for NVR+. This offering covers the depreciation on your vehicle should it be written off, and allows for a choice of an ICBC repair shop with guaranteed repairs if your vehicle needs to be fixed due to a claim. Similarly to replacement cost coverage, the write-off limit is significantly higher than if you purchase NVR+.

You can find additional information on these coverages on our BC Optional Insurance for New Cars page.

To request a quote on New Vehicle Replacement Plus, Replacement Cost or Limited depreciation for your new vehicle, reach out to your local Westland Insurance Broker.