Do you know what your auto insurance policy covers? You may think you’re getting enough coverage for your auto insurance, but you may be leaving out coverage that could leave you vulnerable later on. Even it you think you have ‘full coverage’, it’s important to understand your policy and speak with an insurance professional to avoid costly gaps in coverage.
Take a look at these five common gaps in car insurance coverage.
1. No Collision or Comprehensive.
Often considered optional, collision and comprehensive should be part of your overall policy because they cover damage to your vehicle. With the median cost of a new vehicle exceeding $30,000, it’s foolish to not have collision and comprehensive coverage.
While collision will cover you if your car is damaged in an accident with another car or stationary object, or even if it’s hit while parked. Comprehensive covers repair to or replacement of your car when damaged by non-accident-related occurrences such as theft or ‘acts of God’ such as storms, fires, or an impact with an animal.
While usually these types of coverage are offered separately, some companies offer them as combined physical damage coverage. An exception to purchasing this coverage may be if you have an older car that isn’t worth much. However, collision and comprehensive insurance do tend to go down in cost as a car ages.
2. No Roadside Assistance.
If you don’t have this line item in your policy, you won’t be covered for basic emergency services, such as towing, locksmith service, jump starts and flat tire repair. Some insurance companies such as Liberty Mutual include roadside assistance as part of any auto policy. However, the amount of coverage may be limited. You may also consider purchasing roadside assistance through groups like AAA.
3. No Gap Insurance.
Gap coverage comes in handy when you owe more money than your vehicle is worth. If you get in an accident and your car is deemed totaled, the difference between the appraised value of the car and the amount you owe will be covered with gap protection. Don’t make the mistake of thinking your new car is worth what you paid for it. As soon as you drive it off the lot, it’s a used car and the market value is adjusted accordingly.
4. No Lost Wages Coverage.
This coverage usually included with Personal Injury Protection or ‘PIP’ is designed to help pay a portion of the lost wages for drivers or passengers injured as the result of an accident regardless of fault.
If you are not at fault for the accident, you can still make a claim for reimbursement for all lost wages against the other driver has insurance. Until then, you’re left holding bills you may not be able to pay if you don’t have this type of coverage on your plan.
5. No Rental Reimbursement coverage.
You’ll have to pay for your own rental car if you’re in an accident if you opt out of this coverage. Again, the other driver who is at fault will have to pay for your rental car fees, but this could take awhile and can be a long, slow process.
Until that payment comes through, you’ll have to foot the bill for that expensive rental you needed while your own car was in the shop.
Not having enough coverage could lead to higher pay-outs later if you’re in an accident, are unable to work or your car breaks down on the side of the road. Make sure you get adequate coverage to protect yourself for all the risks driving presents.