In the last issue we talked about how complicated an auto insurance policy can be. We went over the liability portion of the policy. In this months issue we will talk about some of the optional coverages and the pros and cons to adding them.
UMPD (Uninsured motorist property damage) - This optional coverage is usually added to a liability only vehicle. The uninsured motorist property damage insurance cover protects a driver who may be hit by a negligent driver without insurance. This coverage allows the driver to claim for compensation to damages to their vehicle.
Comprehensive coverage- Comprehensive Insurance Coverage is insurance coverage that helps pay for losses to an insured car due to fire, theft, vandalism, hitting an animal, glass breakage, or other losses that are not the result of a collision as stated in the insured's policy. There is usually a deductible that is associated with this coverage. The deductible is chosen by the insured when they purchase the police.
Collision coverage - Collision Insurance covers the damages of the car resulting from a collision with another car or object. Collision coverage reimburses you for the repairs or replacement costs of your car after an accident. A deductible usually applies with this coverage as well. There are many reason that people choose this coverage. If they have a loan in the vehicle it is required by most lending institutions. Also, most people want this coverage on newer car incase they are involved in an at fault accident.
Towing or Roadside service - This coverage is there for you if you have a vehicle breakdown and need to be towed. One thing on this coverage is there is usually a limit on the amount covered. So if the policy only covers $50, you would be responsible for any cost above and beyond that amount.
Substitute Transportation or rental car coverage - This is an added coverage if you want a rental car in the case you are involved in an at fault accident. If you were not at fault in the accident, then the other company is liable to put you in a rental vehicle whether you have Substitute Transportation Coverage on your policy or not. If you are at fault, in order to have coverage to pay for you to get a rental car you have to have this coverage added. This coverage premium is based upon the coverage you choose.