Auto Insurance Add-ons Explained

Auto Insurance Add-ons Explained – All About Auto Insurance Add-ons

Choosing the right auto insurance company is tricky enough. Once you have chosen your auto insurance provider, however, you then need to customize your policy. How do you know what extra policy features and add-ons to buy, though? Which ones will fulfill your needs as a driver?

Most auto insurance providers offer additional add-ons such as Gap Insurance, Roadside Assistance, Vanishing Deductibles, and Uninsured Motorist Coverage. These extra features cost money though, how do you know which ones you can afford and which ones you could afford to do without? Continue reading below for a brief description of these popular car insurance add-ons.

auto insurance add ons

About Gap Insurance

The longer you drive your vehicle and the more wear and tear it accumulates, the less it will be worth. This is the basis of depreciation. Every minute you are off the dealer’s lot you can practically see dollars dropping off drop the value of your car.

If your vehicle is leased or financed, there will be many periods in your history of “ownership” where you owe more than the vehicle is worth. If you get into an accident and total your car during one of these periods, you will be responsible for the remainder of the vehicle’s value. If you don’t want to be responsible for this difference, you might want to consider gap insurance.

To paint a better picture for you, imagine this. If you financed a car for $30,000 and totaled it shortly after getting it from the dealer, say, 2 months later. You are liable for the outstanding loan amount plus interest. If you have only paid off $1,000 and the insurer values the car at $25,000, then you need to pay an extra $4,000 plus interest. If you have Gap insurance, however, you will not be responsible for this $4,000 plus interest.

If you are wondering how much gap insurance costs, you might need to call your insurance agent to get an exact amount. However, we can tell you that you can expect to pay around $100 per year more or less. Many leasing and financial institutions require that you buy Gap insurance. If they don’t, it’s probably a good idea, if not a necessity, to purchase it if you lease or finance your vehicle.

Click here to read more about Gap Insurance.

About Roadside Assistance

If you are ever stranded or broken down on the side of the road, roadside assistance coverage will provide you with emergency assistance. Services usually offered under this type of coverage include towing, flat-tire repairs, jump-starting your battery, and opening locked doors (if you are locked out of your vehicle). This type of coverage is generally inexpensive and readily available. If you lack basic mechanical skills, or will be driving long distances during your commute, getting this coverage is a good idea.

The most well-known roadside assistance provider is probably AAA. But, it’s actually made available by many organizations and companies. Who knows, you might already be covered? Credit card companies and mobile phone providers are increasingly offering this service. Before you buy this add-on from your auto insurance provider, call around and make sure you aren’t already covered.

Click here to read more about Roadside Assistance Coverage.

About Vanishing Deductibles

Many insurance companies offer a “vanishing deductibles” add-on, which is basically a safe-driving rewards program. The way this works is by offering an incentive to you for driving safe. As time passes without an accident or a blemish on your driving record, your insurer will reduce your deductible until it hits $0.

Call your auto insurance provider today to see if they have a vanishing deductible program, and if so, how much it will cost you to be enrolled. Most likely, it will run you around 5% the total cost of your vehicle.

About Uninsured Motorist Coverage

Many visitors here at probably already have uninsured motorist coverage. In fact, it is required by law in 29 states. This coverage will pay for damages resulting in accidents with uninsured people. Because of recent estimates by the IRC that nearly 1 in 7 drivers are driving without insurance, we recommend everyone have this coverage (even if it is not required in your state).

Click here to read more about Uninsured Motorist Coverage.

All the add-ons listed above would be smart additions to any car insurance policy. Many other add-ons, however, are not as wise of a purchase. Continue reading the pages of this website to learn more about the other insurance add-ons.

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