Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001 and has an undergraduate degree from Manhattan College in ...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Joel...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Jul 19, 2021

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Liberty Mutual has “taken it up a notch” when it comes to the never ending game of car insurers battling to offer the newest and best auto insurance coverage options.

The introduction of “Better Car Replacement™” coverage has gotten some recent attention among insurance professionals and consumers alike.

This program is designed to mimic, and exceed standard new car replacement coverage and loan/lease gap insurance coverage offered by other car insurance companies.

The basic concept here is that in the event your car is totaled, Liberty Mutual will provide you with not only a new car, but one that is one model year newer, with 15,000 fewer miles than your current vehicle.

Liberty Mutual doesn’t specify how many model years back they’ll go, so check with your agent (your 1966 Shelby might be not be replaced with a ’67).

*Keep in mind that with many insurers you cannot buy new car replacement on a vehicle that is more than two model years old, but gap coverage may be purchased for any vehicle with a loan/lease regardless of age.

Even with TTIA’s critical eye…Better Car Replacement™ is a pretty darn good deal. Let’s look at the details here to help you determine if this coverage is enough to make current customers stay with Liberty Mutual or convince them to switch insurance companies.

Give Me an Example

Perhaps you have a 2009 model Ford Mustang with 50,000 miles on the odometer.

In the event your vehicle is determined to be a total loss by your claims adjuster, you can expect to be given enough money to purchase a 2010 model Pony with no more than 35,000 miles on it.

That would result in a vehicle that’s one model year newer with 15,000 or fewer miles than the old one. Simple enough, right?

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Just the Facts Ma’am

As with any insurance policy, whether auto, homeowners or commercial, the devil is in the details. You need to understand the coverage and talk to an insurance agent who can explain what you might not understand…which for some consumers is quite a bit when it comes to policy coverage.

While their website is relatively limited in details, you can expect a few of the usual requirements be met by your policy.

You will almost certainly have to purchase physical damage coverage for the vehicle in question. Both comprehensive and collision coverage are probably necessary. This is also referred to as “full coverage,” meaning a liability only policy will offer no rewards here.

[Read more about the difference between comprehensive and collision coverage.]

Also note that the cause of loss must be covered by the policy for the coverage to take effect.

Your deductible will still come into play here. If you have a $1,000 auto insurance deductible, using the example above, if the newer (2010) Mustang costs $20,000, you’d get $19,000 from Liberty Mutual. That’s the $20,000 less your $1,000 deductible.

Keep in mind Better Car Replacement™ DOES NOT cover leased vehicles or motorcycles, so you would not have a shot at this coverage if you fit either of those categories.

And you may not be able to get this coverage in every state, so again, contact your local Liberty Mutual Agent for details.

Make sure to get several quotes from an independent insurance agent before opting to purchase any new auto insurance policy.

While Better Car Replacement™ may be great and come in very handy for some, overpaying for auto insurance never makes sense. If the Liberty Mutual policy is not cost effective in the first place, it simply isn’t worth your time or money.