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New Vehicle Replacement Cost Auto Insurance: Is It Worth It in Richmond?

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Richmond, BC, is a great place to live, work, and play, but with over 150,000 vehicles on the road and infrastructure that has struggled to keep up, it’s also a hot spot for fender benders and serious collisions.

ICBC has made some significant changes to their basic auto insurance coverage over the last few years. Now, instead of the at-fault driver bearing responsibility for vehicle damage, each individual’s own coverage pays for repairs, medical expenses, and vehicle replacement costs.

One of the main goals of the transition to no-fault auto insurance was to help reduce premiums. While this has been the case for many Richmond drivers, there have been challenges with the new system, in particular, what happens when your pricey ride is a complete write-off?

What’s Changed with ICBC Insurance in BC?

In May 2021, ICBC introduced Enhanced Care coverage, shifting to a no-fault model. Under this plan, you are covered for auto repairs, care, and recovery, regardless of fault, through your own auto insurance. With very few exceptions, you can no longer sue the other driver for loss or damages, including recuperating losses when your auto insurance coverage does not reflect the actual value of vehicle replacement in the event of a write-off.

When an insurance adjuster determines your vehicle is a total loss, the payout is calculated based on your car’s actual cash value (ACV) — unless you’ve added optional coverage like NVRC. This change has helped reduce costs, but it also means a new car could lose thousands in value the second you drive it off the lot, and you might not recover that without extra protection.

That’s where New Vehicle Replacement Cost (NVRC) coverage comes in.

What Is New Vehicle Replacement Cost (NVRC) Coverage?

The moment you drive your new car off the sales lot, it begins to lose value. And this decline doesn’t happen in a straight line; new cars lose as much as 30% of their value in their first year alone. So that $80,000 SUV you bought in 2024 could only be worth $60,000 in 2025 and continue to decline at a rate of 15%-20% annually thereafter — and this is the value ICBC will use to calculate your payout.

NVRC is an optional add-on available through ICBC or a private third-party insurer. With this coverage, you are protected from vehicle depreciation by covering the cost to replace your vehicle with a brand-new one of the same make and model, or the closest equivalent, for up to 5 years.

Qualifying for NVRC is simple. Auto insurance brokers in Richmond will always ask customers if they want to add New Vehicle Replacement Cost (NVRC) Coverage to their policy, go over the coverage, and provide a quote.

It’s important to note that while ICBC is the only provider for your basic (and mandatory) auto insurance, optional coverage like NVRC is available through various third-party providers. After you take ownership of your new vehicle, you have 49 days to add NVRC coverage, so take your time. Many drivers find that by shopping around for their optional auto insurance, they can secure a better price and get the flexibility to choose a company with a proven track record of claims support and customer service.

Still not sure if New Vehicle Replacement Cost (NVRC) Coverage is right for you? Ask your local Richmond auto insurance broker to run some numbers. It might be worth it for the peace of mind alone.