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Other Optional Coverage When Buying Car Insurance

By Doug Cohen

Think Twice about Optional Car Insurance

Are optional services on insurance policies such as towing and other extras really worth the cost? How can a driver make a cost-effective choice? If you donít choose carefully you may be paying for perks you don't really need. Some drivers forget to check their credit card offers, car club memberships and other services before signing up for insurance options. Ensurance.com president Doug Cohen tells drivers to beware getting double-billed for identical services.

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"The first thing to ask yourself before deciding to buy towing and rental car coverage is, 'Am I covered for this elsewhere?' 'Does my auto club membership cover towing if I am involved in a car accident?' If it does, then why am I buying it twice?" Cohen says.

"I may know it covers me for roadside assistance if my car breaks down, but what about accidents? And how many miles is the tow limited to? Some high-end car manufacturers like Lexus and Mercedes-Benz provide towing coverage free."

Cohen points out that the terms of your optional car insurance coverage may be more generous than the terms provided from other sources. That is an important factor to consider before deciding for or against optional towing, roadside assistance or other aspects on your auto insurance.

One popular extra on car insurance policies is rental car reimbursement intended to be used while your car is at the repair shop after an accident. Cohen says some drivers sign up for this without thinking of the resources already at their disposal that could save them from needing a rental car in the first place. "Many people own two or three cars but only have one or two drivers in the household, and many times one spouse works from home. So if you have an extra car, do you really need the added expense of rental car coverage?"

Cohen says another factor to consider is the actual amount of reimbursement. How much are you paying for this extra? How much value do you get in return?

"Look at the coverage. It may be something like 15/20, which means $15 a day for 20 days max. Where can you rent a car, including all the taxes and fees they charge, to replace yours on $15 a day? And if you car is wrecked badly enough, will it really be done in 20 days?"

Cohenís advice: Make sure the coverage you pay for is equal to the amount of costs youíll incur with the rental vehicle.

Finally, itís just as important to note that in most cases the policyholder is responsible for paying the cost of the rental up front, and must submit a claim later. If youíd rather avoid paying the cost of a rental altogether, itís best to have a contingency plan for when your car goes to the repair shop. If you do purchase rental insurance, remember to save all receipts to file with your claim. At the rental counter, you can save money by choosing a compact car instead of a full-sized vehicle. Donít forget to check your car insurance policy to see if you can use your own liability and other coverages rather than paying extra for the rental agencyís insurance plan.

One last thing to consider (although this only works when the other driver is at-fault, and maybe not in no-fault states): Remember that if your car is struck and damaged through the fault of another car, it should be their liability to provide you with a replacement vehicle, of like kind and quality, while yours is in the repair shop; one more reason why you might not need to pay for this coverage on your policy. And if you are still unsure, it never hurts to have a conversation about this with your friendly insurance customer service representative.

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