There are a number of options that go well beyond what most people think of when they want “full coverage” car insurance. Here are six options worth knowing about.
GAP Coverage: GAP coverage protects you financially by covering “gap” between what you owe on your car and what it’s worth if totaled. If you owe more than it’s worth totaled before the loan is paid off, or the lease is up you’ll be responsible to pay the remaining balance of the loan or lease after the insurance company pays the depreciated value of your car. It also cost less to add this to your insurance policy than it does to buy it from the dealer!
New Car Replacement: This picks up where GAP coverage leaves off. This is usually offered on new cars during the first few years of vehicle ownership. If your new car is totaled in an accident it will be replaced with a brand new vehicle or that’s one model year newer with 15,000 fewer miles. If your car insurance company offers this option for two or three years, they may pay a “cash equivalent” for your car based on age and condition.
Glass: Many car insurance companies include glass repair with their standard policy. This coverage will repair a chipped or cracked windshield as long as the chip is not deeper than 0.25 inches and the crack is smaller than a dollar bill.
There are a few companies who offer glass coverage which repairs or replaces the windshield with little or no deductible even if it’s larger than the above guidelines. The additional cost is in the range of $25 to $50 a year.
Original Equipment Parts: In an effort to reduce the cost of accident claims, car insurance companies use third party parts to replace bumpers, fenders, light kits, etc. The cost savings for the companies is between 30% and 60%. The downside is there’s no telling whose part is now on your car.
The replacement parts are supposed have the same fit and crashworthiness standards as the original parts, however there’s little data that’s true or their impact on the resale value of your vehicle. If you prefer original equipment parts be used for a repair you can either pay the difference, or opt for this option on your policy.
Accident Forgiveness: Accident forgiveness is usually offered as a reward for staying with a company longer. There may or may not be an additional charge to have this option. It’s based on the length of time you’re with the company before an accident is forgiven and not counted against you. This can be immediate if you have no claim activity for say five years, or an amount of time you’re with them such as three to six years.
Vanishing Deductible: Several car insurance companies offer a vanishing deductible option. This means the amount of the deductible reduces a set amount such as $100 per year until there’s a $0 deductible for an accident. This deductible may be included in a “nicer” insurance package which cost a little more per year than if you don’t have a more standard package. There may also be a waiting period of three to five years of accident free driving before you arrive at the $0 deductible.
Which car insurance option(s) do you want? Share that, along with your thoughts, questions, and experiences with me on my Facebook, Google +, and LinkedIn pages. I’d love to hear from you!
