Replacement vehicle insurance is the promise that you won’t be left without wheels when things go wrong. In Australia, it usually refers to two protections often bundled with comprehensive car insurance: a new‑for‑old replacement if your car is a total loss (stolen or written off), and a temporary accident replacement vehicle or hire car while yours is being assessed or repaired. The exact rules, time limits and costs vary by insurer and policy, but the goal is the same — keep you mobile and, where eligible, get you back into a like‑for‑like car.
This guide explains how replacement cover works locally, the types available, what’s typically included (and what isn’t), eligibility and write‑off rules, the claim steps, when you’ll get cash instead of a car, and how pricing is set. We’ll also cover rideshare and commercial needs, a quick comparison checklist, switching without gaps, key terms, and how to get the best value.
Types of replacement cover in Australia
In Australia, replacement vehicle insurance typically sits in two buckets: a like‑for‑like new‑for‑old replacement when your car is a total loss, and a temporary accident replacement vehicle or hire car to keep you mobile during assessment and repairs. Exact eligibility windows, day limits and costs vary by insurer and policy tier, with some premium options expanding benefits significantly.
- New‑for‑old (total loss): Commonly for cars bought new/ex‑demo within two years of first registration; some premium policies offer lifetime new car replacement when conditions are met.
- Temporary accident replacement/hire car: Often included when you’re not at fault, or available as an optional extra; daily caps and time limits usually apply.
- Theft unrecovered: Treated as a total loss, generally following the new‑for‑old pathway.
- Cash in lieu: If a suitable replacement isn’t available within the insurer’s timeframe, a cash settlement may be offered.
New-for-old replacement after a total loss
When your car is written off or stolen and unrecovered, replacement vehicle insurance can put you in a brand‑new vehicle of the same make and model. In Australia, this typically applies when you bought the car new or as an ex‑demo and the loss occurs within two years of first registration, though some premium policies offer lifetime new‑car replacement if strict conditions are met.
- Eligibility basics: Bought new/ex‑demo, total loss accepted, loss within the policy’s time window; financier consent if the car is financed.
- What you get: Same make/model/series (or similar if unavailable).
- On‑road costs often covered: Initial registration, CTP/MAI, stamp duty and delivery.
- If no suitable car is found: Insurers may pay the amount covered on your certificate of insurance.
Temporary accident replacement vehicles and hire cars
When your car’s in the shop after a smash, replacement vehicle insurance can include a temporary accident replacement vehicle or hire car so you’re not stranded. In Australia, many comprehensive policies include a not‑at‑fault hire car, while at‑fault cover is either an optional extra or bundled with higher‑tier plans. Expect conditions around daily dollar caps, vehicle class, and duration (e.g. until repair or settlement), and you may need the at‑fault driver’s details.
- Included vs optional: Not‑at‑fault often included; at‑fault cover commonly an add‑on or premium tier.
- Limits apply: Daily price caps, class/category limits, and maximum days.
- Out‑of‑pocket items: Fuel, tolls, fines, optional extras and bonds are usually on you.
- If no car’s available: Some premium policies compensate you for reasonable transport costs instead.
What’s usually included — and what isn’t
Before you compare quotes, it helps to know what replacement vehicle insurance typically covers in Australia. Most comprehensive policies include clear benefits if your car is a total loss, plus mobility support while your claim is sorted — but there are limits and conditions to watch.
- New‑for‑old basics: Same make/model/series; if unavailable, a similar car — often including similar accessories, modifications, tools and spare parts.
- On‑road costs paid with replacement: Initial registration, CTP/MAI, stamp duty and delivery.
- Hire car while not at fault: Often included while your claim is settled, if you can provide the at‑fault driver’s details.
- Timeframes and cash: Some insurers try to source a replacement within 90 days; if none is found, they may pay the amount on your certificate of insurance.
- What’s not usually included: At‑fault hire cars unless you’re on a premium tier; lifetime new‑car replacement is limited to select premium covers with strict eligibility; vehicles that cannot be registered aren’t insurable.
Eligibility criteria and common exclusions
Eligibility for replacement vehicle insurance depends on your insurer and policy tier, but most follow clear rules. New‑for‑old replacement typically requires you bought the car new or ex‑demo from a licensed dealer, your claim is accepted as a total loss, and the loss occurred within the policy’s time window. Premium “lifetime” options often require continuous cover from shortly after purchase.
- Bought new/ex‑demo: From a licensed dealer, within the insurer’s stated window (often two years from first registration).
- Total loss accepted: Includes theft unrecovered after the insurer’s timeframe.
- Finance consent: Your financier must consent to a replacement if the car is financed.
- Continuous cover (premium tiers): Lifetime new car replacement generally needs continuous insurance from within 13 months of purchase.
- Not‑at‑fault hire cars: Usually require at‑fault driver details (name, address, rego).
- Registration status: Vehicles that cannot be registered aren’t insurable; repairable write‑offs must be repaired, roadworthy and re‑registered (state rules may limit this).
- Common exclusions: Outside the new‑for‑old window, missing documentation/consents, and at‑fault hire cars unless you’ve added that option.
Write-offs explained: statutory vs repairable
Whether you receive a brand‑new car, a hire car, or a cash payout often hinges on how your vehicle is classified under state and territory rules. Insurers follow these laws when settling replacement vehicle insurance claims, and there are two distinct categories with different outcomes.
- Statutory write‑off: Damage is so severe the car can’t be repaired to a safe standard or re‑registered. This is a total loss and may trigger new‑for‑old (if eligible) or a cash settlement.
- Repairable write‑off: Technically repairable but uneconomical. Re‑registration is subject to state limits; if repaired, roadworthy and re‑registered, insurers may consider cover again.
How the claim process works
Replacement vehicle insurance is designed to keep you moving and settle fairly. After an incident, you’ll lodge a claim, your car is assessed against state write‑off rules, and the insurer either repairs it, replaces it, or settles in cash. Theft that’s unrecovered can be treated as a total loss (some policies use 14 days). A not‑at‑fault hire car may be arranged sooner if you provide the other driver’s details.
- Collect evidence: photos, witness details, and the at‑fault driver’s particulars.
- Report theft and get a police event number (for theft claims).
- Lodge your claim; assessment decides repair vs total loss.
- If eligible for new‑for‑old, the insurer sources a like‑for‑like car (some aim to find one within about 90 days) and often covers initial rego, CTP/MAI, stamp duty and delivery.
- Finalise paperwork (including financier consent), pay any excess, and return the hire car when settlement completes.
When insurers pay cash instead of replacing your car
Sometimes replacement vehicle insurance results in a cash settlement rather than a new car. This typically happens when a suitable like‑for‑like vehicle can’t be sourced within the insurer’s timeframe, or when your policy’s new‑for‑old conditions aren’t met. In those cases, insurers pay the amount covered on your certificate of insurance (or market value, if that option applies).
- No suitable car available: Within the insurer’s sourcing window (e.g. 90 days).
- Outside eligibility: Not within the new‑for‑old window or not bought new/ex‑demo.
- Finance consent withheld: Financier doesn’t provide written consent to replace.
Commercial, rideshare and fleet vehicles: special considerations
If you earn with your car, standard settings won’t cut it. Insurers rate commercial use differently, so your replacement vehicle insurance must explicitly cover rideshare, taxi, courier or fleet usage. Like‑for‑like replacement should match your business use and vehicle class, and hire‑car availability and day limits can be tighter for commercial vehicles.
- Disclose business use: Confirm rideshare/taxi/courier is covered in writing.
- Like‑for‑like class: Ask for a replacement that’s platform‑eligible and fit for purpose.
- Mobility vs income: Hire cars keep you moving; business interruption is separate cover.
- Accessories listed: Include meters, partitions, wraps and fit‑outs to have them considered.
- Fleets: Check any‑driver terms, multiple replacements, and a single claims contact.
Costs and pricing: what affects your premium
What you pay for replacement vehicle insurance depends on the car you drive, how you use it, and the level of replacement benefits you choose. Premium tiers that add broader new‑for‑old car replacement or at‑fault hire car cover usually cost more, while higher excesses can lower your premium.
- Vehicle value and type: Higher‑value or high‑performance cars cost more to insure and replace.
- Usage rating: Rideshare/taxi/courier/fleet use is rated differently to private use.
- Address and parking: Postcode, garaging and theft risk influence pricing.
- Driver profile: Age, licence history and prior claims matter.
- Excess selection: Higher excess, lower premium (and vice‑versa).
- Add‑ons and limits: At‑fault hire car, longer hire periods, or premium “lifetime” new‑for‑old can increase cost.
- Accessories/mods: Declare fitted gear (e.g. meters, wraps) so it’s priced and protected.
- Policy structure: Agreed value vs market value, and preferred repairer options, affect price.
Policy comparison checklist
When you compare replacement vehicle insurance in Australia, focus on how quickly you’ll be kept mobile and what happens if your car is a total loss. Use this short checklist to line up like‑for‑like rules, hire‑car limits and cash‑out triggers across competing policies.
- New‑for‑old window: Two years vs lifetime; continuous cover rules.
- Sourcing timeframe: About 90 days before cash in lieu.
- On‑road costs included: Rego, CTP/MAI, stamp duty, delivery.
- Hire‑car scope: At‑fault/not‑at‑fault, daily caps, duration.
- Registration/finance: Re‑registration requirements; financier consent to replace.
- Business and accessories: Rideshare/taxi/courier covered; listed mods included.
Switching insurers mid‑term without gaps in cover
You can switch providers mid‑term and keep continuous protection for replacement vehicle insurance. The key is to overlap cover so the new policy is active before the old one ends, then close out the old policy and pursue any return premium you’re owed.
- Set start times: Activate new cover before cancellation.
- Get it in writing: Confirm start date/time on your schedule.
- Cancel second: End the old policy after activation.
- Ask about refunds: Request any pro‑rata return premium/fees.
- Update details: Add your financier and listed drivers to the new policy.
Key terms to know
Policy wording can be dense. These are the key terms you’ll meet in replacement vehicle insurance quotes and PDSs in Australia, explained plainly so you can compare benefits fast, spot the limits that matter, and avoid surprises when it’s time to claim.
- Total loss: Uneconomical/unsafe to repair or unrecovered theft.
- New‑for‑old replacement: Brand‑new same (or similar) make/model if eligible.
- Statutory vs repairable write‑off: Statutory never re‑registrable; repairable may re‑register, state‑dependent.
- Amount covered vs market value: Certificate figure versus assessed worth at claim time.
- Not‑at‑fault hire car: Hire car while settling when another driver caused it.
How National Cover can help
National Cover combines competitive premiums with robust replacement vehicle insurance for private and commercial drivers. Our specialists tailor cover to your use and help you switch without gaps.
- Price‑beat quotes: Backed by ASIC‑licensed research.
- Keep moving: Not‑at‑fault accident replacement vehicles, 24/7 towing and a lifetime repair warranty.
- Smooth claims: Fast, expert handling and 365‑day support, with excess discounts via preferred repairers.
Key takeaways
Replacement vehicle insurance keeps you mobile and, after a total loss, can return you to a like‑for‑like new car. Compare terms, limits and costs—especially for business use—and keep cover continuous when switching. For tailored value, get a price‑beat quote at National Cover.
- New‑for‑old: Usually two years; some lifetime options.
- On‑road costs: Rego, CTP/MAI, stamp duty, delivery.
- Sourcing or cash: No match in ~90 days = cash.
- Hire‑car rules: Not‑at‑fault often included; at‑fault extra.
- Write‑offs & consent: Statutory vs repairable; financier consent.
