There’s an advertisement for car insurance in nearly every commercial break. Most of them are promoting some special feature that a particular insurer offers, but they fail to tell you that the same or similar benefits may also be available from another insurer. In this two-part post, we will review what’s really behind some of the most frequently advertised insurance features and what they could mean for you.
State Farm’s Discount Double-Check commercials are doubling down on the search for discounts. They imply that their agents can uncover important, money-saving discounts that may be easily overlooked by inexperienced eyes. Of course, their agents are only double-checking for discounts from their own company, which significantly narrows the potential savings. Furthermore, any agent can double-check for insurance discounts, but only an independent insurance agent can compare savings from multiple insurers.
GAP protection is not advertised as often as other insurance features, but it is still an important and sometimes misunderstood coverage for drivers who finance vehicles – especially those who make low down-payments or accept lengthy repayment terms. That is because it can take years for a new car loan balance to fall below the depreciated, actual cash value of the vehicle. If you total your vehicle while you still owe money on it, the insurance company’s settlement may not be enough to pay off the balance of your loan. GAP protection pays the difference, preventing the need to continue paying out of pocket for a car you no longer have.
Just be careful where you decide to purchase your GAP coverage from. Sometimes, car dealers and lenders offer this protection at the time you purchase your car, conveniently adding the premium to the balance of your loan. However, most borrowers do not need GAP coverage for the entire duration of the loan since the balance eventually falls below the car’s value. That means you could be paying extra money for extended GAP protection that you do not need. By asking your independent agent to add GAP coverage to your insurance policy instead, you may be able to save money by dropping the coverage as you pay down your loan.
New Car Replacement
When you total your brand new car, the insurance company is unlikely to compensate you for the price you paid for the vehicle – even if it is only a few months old. Instead, insurers typically cover vehicles for their actual cash value, which thanks to rapid depreciation, is usually much less than the retail price. With New Car Replacement coverage, insurers may instead cover the cost of a brand new vehicle of the same make and model.
Liberty Mutual is one of several insurance companies that advertise or offer this coverage, and it’s hard to miss their commercials for New Car Replacement. With their plan, you get compensated for the cost of a new vehicle if you total your car in the first year you own it or before you reach 15,000 miles. Other insurance companies offer similar benefits, and some extend coverage for used cars, as well. Travelers Insurance, for example, offers a form of new car replacement protection for up to five years.
In nearly all cases, the extra coverage for a new vehicle comes at an additional cost. Talk with an agent here at Vanyo Insurance for help determining if it could be right for you.
Imagine going years or even decades without an accident or even a traffic violation – the definition of a safe driver. One day you fail to yield right-of-way, causing a minor collision. Your insurance company pays the claim, and you move on, only to see your premiums soar when your policy is renewed. If you had Accident Forgiveness, you would not face surcharges or penalties for a first-time accident.
Allstate is the primary advertiser of Accident Forgiveness, but there are several other insurance companies like Acuity, Integrity, Nationwide, Progressive, and Liberty Mutual that offer similar protection. One company even offers the coverage for free to eligible customers of five years or more.
Continue reading part two of our post Advertised Insurance Features.