Five Other (Optional) Auto Insurance Coverages

November 06, 2020 by Dan Green

Auto insurance can be customized to meet your needs and your budget.

By mixing and matching the six main coverage types, you can get a policy that gives you exactly the amount of insurance protection that you want, for a price you’re happy to pay.

The six main auto insurance coverages types are:

  1. Bodily Injury Liability Coverage
  2. Medical Payments Coverage
  3. Property Damage Liability Coverage
  4. Collision Coverage
  5. Comprehensive Coverage
  6. Uninsured and Underinsured Motorist Coverage

Beyond these six types, supplemental auto insurance is available to fill in the gaps of coverage.

For example, you may want your insurance company to pay for a rental while your car is in the shop. Or, you may want insurance against lawsuits in case you cause more accidental damage than you have coverage for.

Each of the five supplemental insurance choices below will raise your basic auto insurance costs. You may think it’s worth it, however — especially for protection against lawsuits.

1. Get access to a rental car when your car is in the shop

Add Rental Reimbursement Coverage to your auto insurance policy, and your insurer will pay for you to have a rental car while your car is under repair from a covered accident.

There is no co-pay with Rental Reimbursement Coverage and coverage is usually cheap.

2. Get free tow truck and locksmith services

It’s rare for a car to breakdown in traffic, but it can happen. When it does, you’ll be glad to have Roadside Assistance Coverage.

Roadside Assistance Coverage is an auto insurance add-on that can cover sending gas when you’ve run out; replacing a flat tire with your spare; sending a locksmith for when you’re locked out; and towing your car, unrelated to an accident.

It’s a backup plan for when things go wrong.

Roadside Assistance Coverage is inexpensive. However, credit card companies sometimes offer similar coverage to cardholders, so before you pay for Roadside Assistance Coverage from your auto insurer, make sure you’re not already getting it for free.

3. Get replacements for cracked or broken windshields

Full Glass Coverage is not available in all states, or with all insurers. However, if you do a lot of highway driving, it could make sense to add this optional coverage to your auto insurance plan.

Replacing a windshield usually costs drivers a few hundred dollars. Drivers of newer, luxury cars, however, could pay several times that.

If you’re concerned about cracks in your windshield and want to minimize your windshield replacement costs, consider Full Glass Coverage for your car. The cost is low, and the payback could be big.

4. Get covered for wrecking a car immediately after buying it

When you buy a new car, it’s only new until you drive off the dealer’s lot. Once you turn into traffic, the car becomes a used car. Its value decreases immediately.

This truth is problematic for drivers of newer cars who are involved in an accident; and, for drivers whose situation made it better to lease a car than to buy one.

Auto insurers will only pay for repairs up to the value of the car and the value of a used car is far less than a new one. Many cars lose thirty percent of their value in the first 12 months after purchase.

If your car is stolen or damaged so badly that repairs exceed its value, the insurance company will send you a check to replace it. That check, however, will be for less than what you owe on the car.

For situations like this, there’s Guaranteed Auto Protection insurance.

Also known as Gap Insurance, Guaranteed Auto Protection gets you cash for the difference between your car’s value and the amount owed on your car to the finance company.

Gap insurance is a good idea for newer, high-value cars; or, if you’re buying a car without making a significant down payment. It’s not necessary for cars paid for with cash.

5. Get protected against million-dollar injury lawsuits

Your basic auto insurance coverage won’t always be enough to protect you. There are certain instances when you’ll cause more damage than your insurance policy is meant to handle.

Causing a person’s death with your automobile, for example. Or, being the cause of an accident so devastating that the other driver is no longer able to work.

In both of these scenarios, you would be subject to lawsuit for death, lost wages, and more.

Basic auto insurance coverage can’t protect against this. The monies a jury awards would come from your estate, wherever those assets could be found. It could bankrupt you.

This is why Personal Umbrella Insurance exists. It’s a supplement for your auto insurance policy, offering coverage of $1 million, $2 million, or more; usually for a few hundred dollars per year. It’s meant to protect your assets from unexpected events and lawsuits.

The more assets you hold, and the higher your future potential for income, the larger your Personal Umbrella Insurance policy should be.

You don’t need to own a car to keep a Personal Umbrella policy.

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