Vehicle Replacement Insurance
A Vehicle Replacement Insurance policy is purchased with the intent of it covering the difference between the amount a car insurance policy will pay out and the cost of a new car with the closest specification to the original vehicle.
For example, if someone was to purchase a car for £16,000 and after 12 months it was written off, the insurance company may offer to pay the claimant £9,000 leaving the motorist with a £7,000 shortfall. A Vehicle Replacement Insurance policy often purchased at the point of sale, would pay the claimants loss of £9,000 plus any extra funds needed that may be needed to purchase a car with the closest specification to the original vehicle.
In short, a Vehicle Replacement Insurance policy will cover the extra costs needed on top of the insurance pay out in order to purchase a replacement car with an equivalent specification. In addition to this a Vehicle Replacement Insurance claim may be put into cover the costs of an outstanding finance agreement and may even pay out enough to pay for a deposit for a new vehicle.
