How do add-ons enhance car insurance? – Kelley Blue E book

Add-ons can help improve your car insurance by providing additional protection that basic insurance doesn't.

Standard auto insurance includes up to five main types of coverage that can help pay for vehicle damage, injuries, lost wages, and funeral expenses following an accident or other insured event.

But what happens if you need a rental car after an accident? Or is your vehicle a total loss and you owe your lender more than the car is worth? A standard policy does not cover these costs. But certain add-ons do.

Auto Insurance Add-Ons Explained

Car insurance is additional insurance that you can purchase for specific needs. The choice is large and the offers vary depending on the insurer. Here are some of the most common ones that you are likely to see when purchasing auto insurance.

Roadside assistance

Have you ever sat in your vehicle and turned the key in the ignition only to find your car won't start? Or, you ran across a nail on your way to work and have an apartment that needs repair. Roadside Assistance can help if you need to be towed, run out of gas, have a flat tire changed or you need to lock yourself out of the car.

Gap insurance

If an insured event involves your vehicle, the insurance company will write you a check for the value of the vehicle at the time of the incident. If you owe more than the vehicle's worth on your car loan or lease, you will be responsible for paying the difference – unless you have fill-in insurance. Covering the gap can help make up the difference between your outstanding credit or lease balance and the value of your vehicle. Many plans also pay your fully comprehensive or collision deductible.

RELATED STORIES: What Are the Pros and Cons of Accident Insurance?

New car replacement

It's an unfortunate reality. New cars depreciate as soon as you drive them out of the parking lot. If your car is totaled, the insurance company will write you a check for the real cash value of your vehicle at the time of the incident. Even if your vehicle is only a few months old, the depreciation of the car is unlikely to give you a check for the total amount you paid to purchase the car.

A new replacement car insurance protects against depreciation. If the insurance company declares your car a total loss, they will reimburse you for the amount it would cost you to buy a new version of your car – not the depreciation.

However, you can only get this add-on if you are the original owner, and it is generally not available on lease vehicles. The new car replacement insurance is usually valid for about a year after the car was purchased.

Would you like to know how much your car is losing in value? Use our tool to find out the 5 year cost, including an auto depreciation calculator.

Custom parts and equipment coverage

Most standard auto insurances cover optional items up to a certain dollar amount. However, if you have a custom paint job or a state-of-the-art sound system, the coverage limit will likely not be enough to pay for repairs or replacements.

The individual equipment cover offers additional protection for upgrades that you make to your vehicle.

Rental car refund

If you have an accident, you may not be able to drive your car for a while, but you still need to get around. Car rental reimbursement covers the cost of renting a car while your car is in business.

Windshield repair

Having comprehensive insurance coverage can help repair or replace your windshield if it is damaged. However, your excess applies unless you have full glass coverage for windshield repair.

Many newer cars with advanced safety features, including forward collision warning and automatic braking, require cameras to be recalibrated when a windshield is replaced. This cost can add $ 375 or more to the total cost of replacing the windshield.

It costs extra for full glass supplementary insurance, but the insurance company waives your deductible for repairing or replacing the windshield if you choose this coverage.

Car Insurance Supplements: Are They Worth It?

There are many add-ons that you can include in your auto insurance. But the more you choose, the more your policy will cost. So how do you decide if an add-on is worth it?

"It really depends on the cost and risk," says John Espenschied, agency owner of the Insurance Brokers Group. He recommends asking yourself how much risk you would like to take on your own.

Some people don't mind taking more financial risks, while others want the reassurance that they'll be covered if something happens.

What additional services do I need for motor insurance?

You may not need one. But a few well-chosen add-ons can improve your car insurance coverage and minimize expenses if your vehicle is damaged or breaks down. To decide which, if any, are right for you, you need to weigh the costs and benefits of each.

The key is not to choose every insurance coverage available, but to choose the ones that will protect you from the greatest risks you face depending on your vehicle, driving habits and financial situation.

For example, if you're spending $ 15,000 on a $ 30,000 vehicle, then it probably doesn't make sense to pay for gap insurance. But if you're investing $ 2,000, this is something you should consider.

You may be able to afford to pay for a rental car while your vehicle is being repaired. But would you like to be able to get a refund on the rental car for just a few dollars every year?

Whichever type of insurance you choose, it is important to know what your insurance will and will not pay for. According to Espenschied, people often think they have a break even when they don't.

“They get a stripped-down policy for a cheaper premium without realizing that they are missing coverage. (People) really need to have an honest conversation with their agent or broker and ask, “What am I not insured for? Is there something I don't have? ’" He said.

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