5 auto insurance add-ons worth paying for
Buying car insurance can be complicated. Most states require drivers to meet certain minimum coverage requirements, but there are also many optional types of supplemental auto insurance. And whether to buy these optional protections can sometimes be a more confusing question.
While not all types of additional protection are worth paying for, some policy protections are certainly very important. In fact, here are five that are worth paying for.
1. Collision coverage
Collision coverage is one of the most important types of optional insurance. In fact, for people with a car loan, it may not be optional because lenders require this coverage because it is so essential.
Collision insurance covers the repair or replacement of a vehicle if the policyholder causes an accident. Without it, a driver who caused a collision would be forced to replace their vehicle themselves or pay for the necessary repairs without financial assistance.
This is because the compulsory insurance that drivers are required to buy usually only covers property damage to other people’s vehicles if the driver causes an accident – it does nothing to pay for the driver’s damage. own car when something goes wrong.
Collision insurance ensures that a driver won’t have to pay for everything if their car is damaged or destroyed in an accident. It’s a type of coverage that most motorists can’t live without.
2. Full coverage
Comprehensive coverage, like collision coverage, is an optional add-on that many auto lenders require motorists to purchase. This type of policy protects a driver from any loss not related to an accident. For example, if a car is vandalized, a tree falls on it, or it is stolen, the insurance will pay the bill.
Without comprehensive coverage a motorist would be out of luck in the event of a problem that was not caused by an accident, so again motorists will want this protection in place so they don’t have to pay their pocket to repair or replace the car.
3. Gap insurance
Gap insurance is a crucial type of additional coverage for any motorist with a car loan. Without this, drivers could find themselves facing serious financial hardship if their car is destroyed or stolen and not recovered.
You see, insurance only pays the fair market value of the car at the time something happens to it. But the amount owed on the car loan may be more than this amount. A driver would still have to pay back the total owed even if the insurance didn’t pay that much money. Gap insurance will make sure this doesn’t have to come out of your pocket, as it will pay the difference between what the insurer says the car is worth and what the driver owes.
Lenders usually require it too, and for good reason since most people can’t afford to continue making loan payments on a car they no longer have.
4. Reimbursement of the rental car
Most drivers should also seriously consider purchasing rental car reimbursement insurance, even if no lender requires it and state law does not require it.
This policy top-up pays most or all of the costs of a rental vehicle while a car is being repaired after sustaining covered damage or while an insurance case is being settled after a total loss . Without it, a motorist could have to go weeks without a vehicle or pay out of pocket for a rental car.
5. New car replacement cover
Finally, the new car replacement cover is an excellent complement for motorists who have a newer model of vehicle. Since new cars depreciate very quickly, insurance will usually pay much less than it would cost to replace a new vehicle. New Car Replacement Coverage ensures that a motorist can actually get a comparable new car if something goes wrong.
Each of these different types of coverage adds a little extra cost to insurance premiums, but they are worth adding to a policy to avoid serious out-of-pocket losses in the event of covered issues.
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