It’s hard to escape the constant onslaught of car insurance commercials touting special benefits for customers of one company or another. With so many ‘special’ features being advertised on TV, radio, and the Internet, it can be hard to determine which benefits you need on your own car insurance policy. In this post, we will uncover the truth about some of the most frequently advertised insurance features and what they mean for you.
Safe Driver Bonus Check
First up is Allstate’s famous Safe Driver Bonus Check, a policy add-on that promises to write a check for drivers every six months that they are accident-free. The check is really just a reimbursement of premiums – up to 5 percent of the total paid during the policy period. If your premiums were $1,000 for two cars, you could receive up to $50 back for meeting the safe driver standards.
Of course, some stipulations come with the Safe Driver Bonus Check. First, you must enroll in the Your Choice Auto Program, which comes at an added cost. To qualify for this program, you must have a clean driving record as well as a good credit score. Once you meet these requirements, you must then remain accident-free each policy period to receive your reimbursement check.
If you consider yourself a ‘safe driver,’ keep in mind that Allstate is not the only insurance company offering special benefits for customers who keep a clean slate. In fact, many companies will offer you savings upfront in the form of instant discounts instead of making you wait for a check six months later. Others may reward you by lowering your deductible or premiums for each policy period you remain accident-free.
If you’ve ever financed a car, particularly a new one, you were probably offered GAP insurance at the time of the sale. Though it is advertised less than other types of car insurance, GAP insurance can be a valuable benefit. This coverage helps pay the difference between the depreciated value of your vehicle (which is the amount insurers typically pay if your vehicle is totaled) and the balance that remains on your loan.
While you can purchase GAP coverage from your lender or perhaps even the car dealership, you could end up paying for more protection than you need. With lender and dealer options, you generally pay for years of GAP coverage in one lump sum, which could be as much as $400 or more. With a traditional insurer, you can drop GAP coverage once the balance on your loan falls below the value of your vehicle and you no longer need the added protection.
Several insurance companies offer GAP coverage at an added cost. It may even be included in your policy by default if you are enrolled in coverage that guarantees to replace your vehicle with one of the same make and year-model or newer.
New Car Replacement Coverage
Liberty Mutual is famous for those New York-based commercials that brag about replacing your totaled vehicle with a brand new one after an accident. This protection is optional and comes at an additional cost. Furthermore, brand new car replacement can only extend to vehicles that are less than one year old and have fewer than 15,000 miles. Those that are older than a year or have more than 15,000 miles can qualify for Better Car Replacement, which replaces a totaled vehicle with one that is a model year newer and has 15,000 miles fewer than the totaled vehicle.
It can be comforting to know that you will be reimbursed for more than the depreciated value of your vehicle, but Liberty Mutual is not the only insurance company that offers this benefit. Several insurers provide similar protections, and some even include additional benefits. For example, drivers with coverage from Traveler’s Insurance may qualify for a brand-new vehicle with the first five years of ownership – not just the first year offered by Liberty Mutual. Talk with an independent agent here at Doug Hansen Insurance to find out your options if new car replacement protection is an important feature for you.
Next is Roadside Assistance, a benefit that can provide peace of mind knowing you can call for help 24-hours a day. Liberty Mutual is a big advertiser of Roadside Assistance, but the truth is nearly all insurance companies offer their own version of this benefit. Though the coverage may vary from insurer to insurer, it typically provides coverage or assistance for lockouts, flat tires, fuel delivery, and towing 24-hours a day.
Accident Forgiveness is perhaps one of the most recognizable advertised insurance features thanks to years of Allstate commercials touting its benefits. With Accident Forgiveness, Allstate promises that customers will not pay more for insurance premiums after a first-time accident, even if the collision is their fault. However, like the Safe Driving Bonus mentioned in Part One of this post, Allstate’s Accident Forgiveness benefit comes at an additional cost.
Fortunately, many other car insurance companies also offer a version of Accident Forgiveness, giving you many more options if you are shopping around for coverage. Companies like Acuity, Nationwide, Travelers, The Hartford, Liberty Mutual, Nationwide, and Progressive all feature similar protection, although it may go by other names. Some, such as Integrity Insurance, may even offer first-time accident forgiveness for free to policy-holders of five years or more.
Bundle and Save
Progressive has made bundling and saving a well-known discount in the world of insurance. Cost-conscious customers can purchase multiple lines of coverage from Progressive to garner a discount. Of course, nearly all insurers offer added discounts for customers who insure a home and auto with the same company. Some also provide bundling discounts for other types of coverage, such as RV and motorcycle protection.
Name Your Price Tool
Another frequently advertised feature is the Name-Your-Price Tool, something Progressive marketed to potential customers looking to save money on car insurance. Unfortunately, this ‘tool’ allows drivers to strip a policy of important coverages in an effort to achieve a specific price. While some customers may perceive it as beneficial, the truth is this ‘tool’ could be causing more harm than good. Instead of sacrificing coverage for the sake of low premiums, talk to an independent agent here at Doug Hansen Insurance to learn low-risk ways you can save money on car insurance.
Discount Double Check
Finally, the ‘Discount Double Check’ rounds out our list as one of the most commonly advertised insurance features on television, radio, and the Internet today. State Farm uses this ‘feature’ to suggest that other insurance companies could be forgetting about money-saving discounts you may qualify for. They claim to double check for discounts, although those discounts are limited to those offered by State Farm.
In reality, any insurance agent can double-check for discounts, but only an independent agent can compare discounts from several insurers and determine which ones will minimize your premiums costs. When you choose Doug Hansen Insurance, for example, we can double-check for discounts from several different Wisconsin insurers, not just one.
When it comes to advertised insurance features, don’t read into the hype. Always contact your agent to ask about coverage availability and discounts before assuming any particular benefit is limited only to a single insurer.