Automobile Insurance Part 3 – Should I get the Extras?

Speed Racer(Continued from Part 1 and Part 2.) In addition to liability, collision, and comprehensive coverage, there are a couple other options to choose from in the car insurance world. These include: Personal Injury Protection, Emergency Road Service (Towing), Rental Car Coverage, Full Glass Protection.

Personal Injury Protection
While Liability covers the other person’s vehicle, PIP covers the medical cost for the passengers in your vehicle, no matter who’s fault it was. Chances are if you already have decent health and disability insurance, you won’t need this coverage. Some states require a minimum amount, like mine. I’m just carrying the minimum.

Emergency Road Service (Towing)
It’s pretty obvious what this covers, but as always there are limits to what it covers. Some coverages only will cover the first 10 miles or so, and you have to pick up the rest. According to StateFarm.com, my policy includes:

1. Mechanical labor up to one hour at the place of its breakdown.
2. Towing to the nearest place where repairs can be made during regular business hours.
3. Towing the car out if it is stuck on or next to a public highway.
4. Delivery of gas, oil, loaned battery, or change of tire, but not the cost of such items.
5. Locksmith labor for up to one hour if you lose your key or lock it in your car.

It costs $10/year for me. AAA costs $55/year. Granted, AAA has other benefits for sure, and I haven’t compared the exact features, but I doubt it’s worth $45/year. I’m keeping this one.

Rental Car Coverage
This covers renting a car when your car is being repaired because of a covered accident. Often it only covers like $15 a day or 80% of the cost, depending on your level of coverage. This is only needed if you are at fault, since otherwise the other guy’s insurance with cover it. If somehow I did lose my car, most days I’m pretty sure I could work something out with my wife. Otherwise, I’d probably get a better price from Priceline or Hotwire. Not getting this.

Full Glass Protection
This option waives your Comprehensive deductible for windshield glass claims. So if a rock breaks your windshield, you get it replaced for free. It may be a good deal if you set your Comprehensive deductible really high and drive on the highway a lot. I know I’ve gotten 3 rock chips in my windshield in the last year. Either way, State Farm doesn’t offer Full Glass coverage (edit: in my state), so I’m out.

Armed with this info, I met with my State Farm agent and got some new quotes last week and also got a quote for my “new” car. I’m summarize in my next post.

Comments

  1. Love the blog.

    I would like to add a few notes, however, to your recent postings re: auto insurance. I work as an adjuster for a major insurance company handling, among other things, auto claims.

    If you’re interested and don’t feel like reading this entire comment, then let me give those reading this one piece of advice: don’t get your insurance advise from a blog, even a blog as good as this one. Insurance varies too much from state to state. Find an agent that you trust and consult him. He should be extremely knowledgeable about the insurance laws and available coverages within your state. If you don’t have a sense of confidence after speaking with him, find someone else. A good agent is not merely a salesman, he is a licensed (in most states) professional.

    Now, for whatever this is worth:

    1. Most optional coverages (ie, anything beyond collision, comprehensive and liability coverages) vary greatly from state to state. While this site provides some interesting notes, your best bet is to sit down with your agent and MAKE him explain in detail each available coverage and what it does. Don’t let him get away with terms like “full coverage” ask him to describe each and every basic coverages included under the standard policy as well as those which can be added by endorsement.

    2. Full Glass Protection — comes as standard under all auto policies in some states. Florida is one. State Farm (and any other carrier) includes it because the state makes them.

    3. This blog takes far too light a view of rental coverage. It’s cheap and, unless you have multiple vehicles, usually well worth it. Buy as much coverage as you feel you will need. I would recommend at least $25/day up to $500 (or something similar, depending on how your insurance carrier structures it). That will cover you for nearly 3 weeks in a compact or intermediate vehicle. Also, don’t buy into the idea that you don’t need it unless you are at fault. If the other party is at fault, his insurance (assuming he has any) will ultimately reimburse you for reasonable rental expenses, but that is contingent on them determining liability. If their policyholder is uncooperative, that can take time. When you’re bumming rides, you’ll wish you had rental.

    4. PIP (and other available medical coverages) may or may not cover all of the passengers in your vehicle. In some states, it only covers family members who reside in your household. Again, talk to your agent.

    5. Finally. Don’t buy the state minimums for liability. Please. Even if you are a college student living on Raman noodles. Don’t do it. In most states they are absurdly low. $5000 in property damage won’t repair most cars. $10000 in bodily injury liability doesn’t go far either.

    Sure, maybe you’re judgement proof. That’s not an excuse. It’s sure as hell not an excuse if you’re carrying low deductibles under collision and comprehensive.

    Don’t buy the lowest you can get away with. Instead, as the blog says, buy the most you can afford. Even if you need to bump your collision and comprehensive deductinles up a little to pay for it. If you don’t then you’re part of the problem.

    Here endeth the soapbox.

  2. Thanks for your comment! You’re right, you shouldn’t base your insurance advice from a blog. Or a comment on a blog. Or any internet site really. It’s all just part of an ongoing conversation, with people voicing their opinions, whether agreeing or disagreeing.

    I like your advice on finding a good agent (for those companies that have agents). This is critical, as like you touched on, often insurance “professionals” are also salespeople that work on commissions and performance/profitability. I’ve found it hard to raise my deductibles or change my options in the past with certain agents. There’s usually another agent with the same insurance company down the road that also wants your business.

  3. I loved to watch Speed Racer when I was young!

  4. Me too! :) Every Saturday Morning. Go Go Go Speedracer Goooooo

  5. Donna Hines says:

    If my son fell out of the back of my truck and broke his arm, would he be covered under PIP. We were getting ready to go somewhere and he got into the back to take something out and fell.

Speak Your Mind

*