If you are insuring a new car, then you might be thinking about taking out additional auto insurance. Regular coverage works on a depreciation cost basis. So, a claim payment might not match the price you've just paid for your car.

If you want a fuller insurance payment if you total or lose your car, then you can take out a new car replacement policy. This coverage ensures that an insurance payment matches the actual price of your car rather than its depreciated value.

However, before you buy this coverage, you should check that it meets your needs. To do this, ask the following questions.

1. Does Your Car Qualify for This Coverage?

Insurance companies set new car replacement coverage rules. Your car will have to meet policy requirements before you can apply.

For example, some companies will only sell new car replacement coverage within a set post-purchase period. They only give you coverage if you apply within a set number of months after buying the car.

While some insurance companies don't have this requirement, all are likely to have limits on new car classification. For example, you might only get coverage if your car is less than one or two years old.

Some companies also set mileage limits. If you exceed this limit, then you can't buy a policy even if your car meets the insurer's new car age criteria.

2. Do You Need Other Supplementary Policies?

You generally have to take out other supplementary insurance to qualify for new car replacement products. Most companies won't sell you this insurance if you only have basic liability auto coverage.

Typically, you need both comprehensive and collision policies before you can add new car replacement coverage. This isn't a problem for most new car owners who want to ensure that they have as much protection as possible for their new asset.

3. Can You Get Better New Car Coverage?

Some insurers add an extra benefit to their new car replacement policies. You can take out better-than-new coverage.

These policies work just like new replacement options. However, your insurer guarantees to pay for the newest model of your car if one has come onto the market after your original purchase. You get an upgrade on your current car if you need to replace it.

To find out more about this coverage and whether you can buy it, talk to auto insurance companies or agents.