Your car is a vital part of your daily life, whether it’s commuting to work, running errands, or handling unexpected situations on the road. While basic liability coverage is mandatory in most states, many insurance companies offer add-ons that can provide enhanced protection. The challenge is figuring out which add-ons are worth the extra cost and which ones are simply an unnecessary drain on your budget. Here’s a breakdown of the top five add-ons to consider—and three you might want to skip.
Worth Paying For:
- Rental Car Reimbursement
If your car is in the shop for repairs after an accident, getting around without your own vehicle can be difficult. Rental car reimbursement ensures that you have a vehicle to use while yours is being repaired.
“For around $15 to $30 a year, this coverage provides a rental car so you can maintain your daily routine without disruption. This small investment offers a significant convenience if you rely on your car for daily transportation.”, say the experts at Illinois Vehicle,car insurance agents in Joliet, IL.
- Roadside Assistance
Imagine being stuck on the side of the road with a flat tire, dead battery, or even worse, your car won’t start. Roadside assistance provides emergency help for situations like these, covering things like flat tire changes, battery jump-starts, lockouts, and towing. For an additional $50 to $100 annually, you get peace of mind knowing that help is just a phone call away, no matter where you are. While some credit cards or phone plans may offer similar perks, having roadside assistance through your insurance means one less thing to keep track of in an emergency. - New Car Replacement Coverage
If your car is totaled, standard insurance will only pay out the depreciated value, which can leave you with a financial gap if you owe more than the car’s worth. New car replacement coverage ensures that you’ll receive enough money to replace your vehicle with a brand-new model of the same make and model, rather than a depreciated value. Typically applicable to vehicles under two years old, this coverage costs about 5-7% more than standard comprehensive coverage, but it can be a smart choice if you’re looking to avoid a financial setback in the event of a total loss. - Uninsured and Underinsured Motorist Coverage
Even though car insurance is mandatory, many drivers are on the road without adequate coverage. If you’re hit by an uninsured or underinsured driver, this add-on protects you by covering your medical expenses and vehicle repairs. For a small increase in your premium, it’s an affordable way to ensure you won’t be left with the financial burden if another driver doesn’t have enough insurance to cover the damage. With one in eight drivers uninsured, this coverage offers valuable protection. - Accident Forgiveness
Accidents happen, and the last thing you want is for your insurance rates to increase dramatically after your first at-fault accident. Accident forgiveness prevents your premium from spiking after a first-time mistake. For $50 to $100 a year, this add-on can save you hundreds, or even thousands, in increased premiums over the long term. It’s particularly useful if you frequently drive in busy areas or if you’re just starting out with insurance and want to avoid steep increases after a minor mishap.
You Can Skip:
- Car Rental Coverage When Traveling
Many insurance policies already extend coverage to rental cars, so paying for extra rental car insurance is often unnecessary. Before purchasing rental car coverage at the counter, check with your insurance agent to confirm whether your existing policy already covers rental vehicles. Additionally, many credit cards offer secondary rental car insurance when used to pay for the rental, so between your credit card benefits and your auto policy, you may already be covered. - Towing and Labor Coverage If You Have Roadside Assistance
If you already have a roadside assistance membership, like AAA or a similar service, adding towing coverage through your car insurance is often redundant. Roadside assistance services generally cover towing, and they often come with other perks, such as travel discounts and other benefits. Check what your current membership offers before adding towing coverage to your policy. Paying twice for the same service doesn’t make financial sense. - Gap Insurance on Older Vehicles
Gap insurance is useful for new cars, especially when you have a loan and the car’s market value is less than the amount you owe. However, once your vehicle is older or paid off, you’re unlikely to owe more than the car’s worth. If your car is more than three years old or you’ve paid off most of your loan, gap insurance may no longer be necessary. Check your car’s current market value against your loan balance to determine if gap insurance still serves a purpose. Once your loan balance is lower than the car’s value, you’re essentially paying for coverage you no longer need.
Making Smart Insurance Decisions
Choosing the right add-ons for your car insurance policy is about balancing coverage with practicality. While it’s important to protect yourself on the road, you don’t want to pay for extras that don’t add value to your specific situation. Review your policy regularly to make sure your coverage matches your current needs. Factors like the age of your vehicle, your driving habits, and how often you use your car will help guide your decision.
Understand what each add-on actually covers and assess whether it aligns with your needs. Don’t let anyone pressure you into adding coverage you don’t need, but also don’t skimp on the protections that could save you money or stress in the long run. Having the right coverage will give you the confidence to drive knowing that you’re adequately protected in any situation.
