Auto insurance policies are made up of sections and categories of coverage. For example, we often break policies up into two main sections: liability and physical damage. Liability coverage pays for damage to a third-party, such as damage to the another persons vehicle or other property. Physical damage covers your property and is called first-party coverage. Collision coverage, cleverly named, pay for damage caused by collision or upset (roll-over). Comprehensive pays for damage caused by something other than collision, such as vandalism, theft, fire and glass damage.
There are also many additional auto insurance extras that you should understand before you choose whether or not to purchase them. These “extras” are often value-added coverages that provide a higher level of service and convenience to your auto insurance policy. Let’s discuss these auto insurance extras in more detail:
- Towing or roadside assistance. Towing is not necessarily the same as roadside assistance so make sure you understand which is offered by your policy. Towing coverage is generally simply reimbursement for the cost of a tow. You are responsible to find and pay for the towing service and then submit a receipt for reimbursement. Roadside assistance, in contrast, provides you with a toll-free number to call 24/7 if you run out of gas, have a mechanical breakdown or lock your keys in the car. Roadside assistance may cost a bit more, but it is far more convenient in an emergency.
- GAP coverage. It’s no secret that newly purchased vehicles depreciate quickly. In fact, that new vehicle is worth about 10% less than you paid for the minute it leaves the dealership. Within 1 year, it is worth 20-25% less. If you are leasing or financing that new car, there is a very real chance your loan balance will be higher than the vehicle’s value the first year or two. GAP insurance provides coverage for the difference between the loan balance and the actual market value of the car. Unless you made a substantial down payment, GAP insurance should always be purchased for a new car.
- Rental reimbursement. Should something happen to your vehicle, such as theft or a collision, would you be able to afford a rental car for several weeks? If not, consider buying rental reimbursement coverage. This auto insurance extra provides a daily limit, such as $30 or $50, for a specified period of time, usually 30 days.
- Custom parts and equipment. Has your ride spent some time getting “pimped out” just the way you want it? If so, remember that auto insurance pays for damage based on the original equipment provided by the manufacturer. So if, for example, your lifted pickup with custom wheels and tires that is stolen the insurance company will pay for the value of the original tiny wheels and tires. The solution to this problem is to buy additional coverage for custom parts and equipment. Simply declare the value of those accessories to your insurance agent or company. You should see an endorsement to the policy that shows the additional parts and associated value.
- OEM parts guarantee. There is a debate in the collision repair industry about the quality of aftermarket repair parts. Depending on who you ask, aftermarket parts are either junk or perfectly acceptable replacements. If you want to stay out of this debate, see if your auto insurance provider offers an OEM only parts guarantee or endorsement. This means the body shop will only use factory parts to repair sheet metal or bumpers.
We get that auto insurance is often something consumers don’t really want to think about very often. However, when something goes wrong, we want to make sure you have the right coverage and are happy with the claim outcome. At Safeguard Insurance, we’ve been providing auto insurance to residents of Nevada, Utah, Arizona and California for over 15 years. Our agents have the experience to find you the right coverage at the right price. Contact Jessica Schneck at 702-529-0118 or Heidi Gebs at 702-529-0113 for a no-obligation quote. Or, visit our auto insurance quote page to compare rates with up to 15 different providers instantly.