When shopping for insurance, everyone wants to maximize their insurance dollars. At the same time, insurance professionals in hopes to acquire new business strive to offer potential and current clients the lowest rates. While receiving a great bargain is the goal, sometimes a few extra dollars can turn a good policy into a GREAT policy. As consumers, you need to have a good handle on what you truly value from an insurance company in terms of coverage options. Regardless of your situation, it is smart to find out about every coverage your insurance company offers and see if any is worth adding to your base plan. We will look at some of the major options insurance carriers offer and also some rationales to add them to your plan.
Coverage Options: What Exactly Are We Talking About?
When I speak about coverage options, I am referring to the optional coverage that does NOT have to be on your policy. While Collision and Comprehensive do not have to be on your plan by law per se, in most cases they are required if you are taking out a car loan and are crucial when constructing a policy for most drivers. Optional coverages are things like Roadside Assistance, Rental Car Coverage, Full Glass, New Car Replacement, Accident Forgiveness, etc. There are many reasons to carry all of these if possible on your policy. What you as a consumer need to figure out is which of these brings the most value to you.
Roadside Assistance and Rental Car Coverage
Let’s look at the most basic of the aforementioned coverage options, Roadside Assistance and Rental Car Coverage. Roadside Assistance or Towing provides several benefits to an insured whose car is disabled on the side of the road due to mechanical failure. Benefits can include tow service to your home or nearest repair facility or a jumpstart. This is where many agents may want to cut costs for potential clients in the never-ending fight to win sales. For the most part, coverage is typically under $20 per year so unless you have towing under your car warranty, cell phone provider or otherwise, it is a good thing to have. Even if you have this service, if you use it once a year, it more than pays for itself.
Rental Car Coverage or Rental Reimbursement provides alternative transportation to you while your car is being repaired due to a covered accident. This is another place where costs are cut. A sound agent will take into consideration what kind of vehicle you drive every day when they offer you this coverage. This is because you as a consumer who drives a minivan will be highly upset with your advisor who saved you so much money if your coverage only pays for a sub-compact car! To upgrade to appropriate coverage is typically not much more. For example the difference between $20 a day and $50 a day can be as little as $10 per year or less! Many people have rental car coverage through their warranty plan but it is important that this coverage extends to an accident scenario.
Other Coverage Options
Full Glass Coverage is an addendum to your Base Comprehensive which in many cases will replace your windshield for $0 or significantly lower than your comprehensive deductible. This coverage is a lifesaver for those times you may get a chip in the windshield and do not want to spend a few hundred dollars to replace it. For high end vehicles and especially RVs, the extra money you spend on this coverage will more than be worth it as those windshields can be very pricey.
Accident Forgiveness is a coverage where in the event of an at fault accident, your insurance company will not raise your rates on you because of the accident. This is a newer coverage many companies are selling to the public. One key fact about this coverage is if you decide to leave your company, the accident will be on your MVR and other carriers WILL RATE YOU FOR THE ACCIDENT.
New Car Replacement is a coverage where in the event of a total loss, the insurance company will pay you the replacement value of your car and some even a model year newer. This is definitely a good coverage to consider. Gap Insurance, which is sold typically by your auto dealer pays the car loan off in the event of a total loss. Depending on your budget, either option is a good idea but I would not recommend both.
As you can see, there are multiple reasons to have each of the coverage options listed here. Again, it is important to discern if any of these coverage options are essential to you in terms of being a part of your insurance policy and also can the additional costs fit within your Insurance budget. As always, a trusted and competent insurance agent will help you decide this but overall, it is up to you to be the final judge.