(PRWEB) May 08, 2013
The optional coverage on a car insurance policy ranges from basic collision and comprehensive coverage which provide protection for the insured vehicle in an at-fault accident, to additional helpful options that can cover a rental car, provide extra coverage for a brand new car, or help drivers avoid rate increases on their first accident. Choosing the right options is easier with an understanding of how they work.
Choosing Options Based on Need
When it comes to selecting the right optional coverage for an insurance policy, the most basic question that needs to be answered is, is it necessary?
Drivers often choose as much optional coverage as they can, without regard for the fact that they may not really need it, which can lead to overpaying. On the other side of that coin is skipping out on valuable coverage that can save a lot of money in the long run. Take a look at some of the common coverage options and consider how necessary they may be.
Rental Car Coverage and Loss of Use
A driver who frequently rents vehicles when travelling should speak to their insurance professional about adding rental car coverage to their car insurance policy. While rental car companies do offer their own coverage, it can be very expensive – especially when it is needed often enough. Car insurance coverage doesn’t automatically extend to a rental car, so it’s important to be certain it is added to the policy.
Loss of use can often be confused with rental car coverage, but it’s very different. Loss of use pays for a rental car to be used during repairs under a covered claim. While many insurance policies include this, it’s not always the case – so be sure to verify it.
Waiver of Depreciation
This optional coverage is only available on new cars purchased within the past two to five years (depending upon the insurance company), so those driving older vehicles don’t need to worry about it. For those who have purchased a new car, this optional coverage can mean the difference between being able to buy another brand new car in the case of a total write-off and having to buy something of a lesser value to replace it.
Every car depreciates; from the day it is driven off the lot it loses value. With waiver of depreciation, a car less than two years old will receive an insurance benefit equal to the purchase price of that same car brand new, rather than the depreciated value.
While this has been a very popular new insurance option in recent years, it’s not automatically included with all insurance policies. “Many people think that accident forgiveness is a part of their policy, but depending on the insurance company that you are with, it may have to be added for an additional premium.” Explains Tammy Ezer of InsuranceHotline.com.
Accident forgiveness allows drivers to avoid the insurance rate increase that comes with their first accident in many situations. Anyone who has no accidents on their record can benefit from this coverage option. Even with an at-fault accident on a driving record, there are still savings to be had. Shopping around for car insurance quotes is the best way to find out how much can be saved.
About: InsuranceHotline.com is a free online insurance rate comparison service that directs consumers to its large network of more than 30 insurance companies and licensed insurance professionals and provides quotes based on the lowest rates available through its network. In business since 1994, InsuranceHotline.com does not sell insurance, is not a licensed broker, and is not owned in whole or in part by an insurance company, agent or brokerage; ensuring consumers get a truly unbiased quote.