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Collision Coverage & the Replacement Cost Coverage Option

Typical collision car insurance coverage only reimburses the car owner up to the actual cash value of the vehicle before the accident.

An option some car owners add to their policy (for an extra premium) gives replacement-cost coverage for new or nearly new cars under the collision car insurance coverage.

This option gives the car owner the full cost of replacing the car with a new or very similar car if the car is considered a total loss.
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