We continue with Part Two of our post, Advertised Insurance Features.
New Car Replacement
As we switch gears and begin covering special advertised coverage types, we will begin with the New Car Replacement from Liberty Mutual. Perhaps you remember the woman in the Liberty Mutual commercial asking, “What are you supposed to do? Drive three-quarters of a car?” She goes onto say that Liberty Mutual must not want you driving around on three wheels. That is because standard collision insurance only covers the depreciated value of a vehicle. New Car Replacement coverage is designed to replace a totaled vehicle with another one just like it.
While New Car Replacement can be valuable for someone who recently purchased a vehicle, the benefit is not exclusive to Liberty Mutual. Several insurance companies offer similar coverage, although benefits and requirements may vary. For example, you may qualify for ‘better’ car replacement if you drive a used car, or you may prefer the extended Premier New Car Replacement offered by Travelers Insurance for up to five years of ownership. The bottom line is you should talk to your independent agent about your options if you are considering adding replacement coverage benefits to your policy.
Similar to New Car Replacement, the next coverage on our list is GAP protection. Though it will not buy you a new car, it will pay the difference between the balance left on your car loan and the depreciated cash value settlement for your totaled vehicle. Depending on how much you owe and the value of your vehicle when you total it, this coverage could protect you against thousands of dollars in losses.
GAP protection can be added to a car insurance policy through an independent agent here at Imes Insurance, and it can just as easily be dropped when you pay down the balance of your loan and no longer need the coverage. Keep in mind that if you accept the GAP protection offered by your lender or car dealership instead, you may pay hundreds of dollars for coverage that lasts longer than you actually need it.
Another coverage that frequents the Liberty Mutual commercials is Roadside Assistance. This coverage is exactly what it sounds like – coverage for emergency help when you experience a breakdown, lock-out, flat tire, or some other covered event. We often recommend this protection for policy-holders who wish to protect themselves or other drivers on their policies against vulnerable situations.
If you wish to add Roadside Assistance to your policy, you probably do not need to switch insurers. Nearly all insurance companies offer some type of roadside protection, although the exact benefits may vary from insurer to insurer.
Finally, we come to Accident Forgiveness, a feature advertised by Allstate Insurance. You may have seen commercials with teen drivers who tell their parents not to worry about the accident they caused since the family has Accident Forgiveness. This coverage prevents premium surcharges and penalties because of a first-time accident.
Though it costs extra from most insurers, a forgiveness policy can make sense for certain policy-holders. Given that premiums can rise by as much as 40 percent after an accident and remain high for three to five years, a forgiveness feature could save you hundreds or even thousands of dollars, depending on the company and the risk profiles of the drivers on your policy. Several insurers offer forgiveness for first-time accidents, some of which include Progressive, Nationwide, The Hartford, and Acuity. Integrity Insurance even offers it for free to certain drivers after five years or more.
The bottom line is there is usually more to the insurance features you see on TV than initially meets the eye. Give us a call here at Imes Insurance for more information about incentives, benefits, and discounts, or to add a specific type of coverage to your policy.