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If you have a new car or lease a relatively new car, you might be thinking about if you should get new car replacement insurance. This insurance will cover you if you happen to get into an accident with your new vehicle and your new vehicle is in unrepairable condition. If you don’t get this insurance and you happen to get into a serious accident causing your vehicle to end up in unrepairable condition, your insurance company will not cover you for the full value that you paid for your vehicle. This type of insurance is something that you should consider if you don’t have a whole lot of money to spare or if you just don’t want to cover the difference between whatever your insurance company pays you and the value of buying a brand-new vehicle again.


To help you decide if you want this on your insurance policy or not, we will go through the various Canadian Provinces and if this insurance is available where you are located. To make this easy for you, we created a table covering all the Canadian Provinces:

Canadian ProvincesIs new car replacement insurance available?
British ColumbiaInsurance must be purchased through the government
ManitobaInsurance must be purchased through the government
New BrunswickYes
Newfoundland and LabradorYes
Northwest TerritoriesYes
Nova ScotiaYes
Prince Edward IslandYes
SaskatchewanInsurance must be purchased through the government

New Car Guarantee Variables:

new car

One of the things that vary from company to company is the terms associated with this insurance policy. Following a collision, you will receive either the sum of money that you used to pay for your, now unrepairable vehicle or the sum of money that a brand-new version of the exact same model of vehicle costs. This is extremely important to remember, especially if you have a rare model of vehicle. You would not want to get into an accident and only be covered for the value of a newer model of the same vehicle that you own if this was the case. Therefore, it is extremely important to make sure that you consider the details of all “new car guarantee” policies to make sure that it is what you are looking for.

How to decide if you need this policy:


One of the best ways to be able to decide if you need this policy is to have a look at your bank account. Look to see if you can pay for a new vehicle after seeing what your auto insurance company will currently offer you for the vehicle you are driving. If you haven’t bought your new vehicle yet, you should look to see how much money you’re going to have leftover afterward. This is a policy that is going to increase your insurance premium and it is important to make sure that you have enough money to cover the extra cost. Remember, your insurance company is not going to give you anything if you total your vehicle without this insurance policy. You are likely still going to be getting enough money to be able to buy a used vehicle, so you should keep that in mind.

Incorporating the policy:

Different insurance companies carry out this policy in different manners. Different insurance companies will also have different standards for when this policy kicks into place. Usually, the company will have to consider your car to be a total write-off for them to kick this policy into gear. Sometimes you will be able to find the total dollar amount that an insurance company is willing to pay to be able to make repairs or decide if your vehicle should be scrapped. This is a number that you might want to know. You may even want to talk to the insurance company you are looking at to see if they have some sort of a rough number to give you. It isn’t always worth it for an insurance company to fix your vehicle depending on what is wrong with it, which you should keep in mind.

Term Length:

Another huge variable that you’re going to come across when shopping around at different insurance companies is how long the company allows this new car replacement policy to last. Sometimes, a company will allow you to get this policy as soon as you buy a new car and let you keep this policy for up to five years after you purchase it. Other companies are not so generous or don’t have as big of wallets. Therefore, some have strict kilometer limits and low time limits on your car to reduce their overall risk. Some insurance companies may be as strict as offering this insurance policy only to people whose car is under six months old and only to cars that have kilometer limits as low as 10 to 15,000 km.


Although this may seem like an ideal policy in terms of keeping you from having to pay out any money to the insurance company, it is important to keep in mind that you will likely have to pay a deductible. Deductibles are almost always paid to the insurance company when an accident occurs. If you happen to total your vehicle, you should expect to have to pay a deductible to be able to activate this policy. Different deductibles certainly do affect your insurance rates, which is extremely important to keep in mind. You don’t want to have such a high deductible and such a minimal difference between the cost of what you paid for the vehicle and what the insurance company will offer you. If that is the case, then this policy is not worth adding to your insurance premium.

To Conclude:

new car

We hope that this article has helped you to be able to decide if you want to buy new car replacement insurance. This isn’t a cheap policy to add to your insurance plan, but it can literally save you thousands upon thousands of dollars if you happen to destroy your vehicle. If you tend to drive a lot or have a really expensive vehicle and don’t have the money to replace it, then it can be more than worth your time and money to add this policy to your insurance premium. This policy certainly isn’t for everyone, but it is something that is worth considering.

About the Author: Ashley Miller

Ashley is an insurance content professional and very knowledgeable on all related subjects. Ashley has over 12 years of insurance content writing experience working with various insurance companies throughout her career.