Are you in the market for car insurance? Even with websites that help with the car insurance quotes comparison process, it can still be quite confusing especially when you don’t know what to look for. Apart from the usual main components of liability and comprehensive insurance, there are various add-ons that insurance companies offer.
What is an add-on?
An add-on is extra protection offered by the insurance company on the insurance policy. These extra protections are not part of the legal minimum that your state requires. As such, you don’t need to have them. However, you may find some of them useful depending on your personal requirements and circumstances.
Add-ons to ditch
According to Consumer Reports, the cost of car insurance premiums has risen since 2013 by over 10 percent. According to reports, these rates will continue to rise by 5-10 percent in 2016.
Car insurance add-ons come at an extra cost, after all insurers need to make a profit. While some add-ons are beneficial, others simply aren’t worth the extra cost. If you want to reduce the cost of your car insurance premiums, you need to know which add-ons to consider and which to ditch. The following are car insurance add-ons that just aren’t worth it:
1. Rental car insurance
If you’re renting a car, you may be asked if you want rental car insurance. Check with your auto insurance or credit card. You may already be covered for this. Many consumers aren’t aware that they already have coverage and end up spending a lot of money on insurance that they don’t need.
If you already have comprehensive, collision or liability insurance coverage, then don’t pay more money for this add-on. You should also check with your credit card to find out what types of insurance they extend for rental cars.
2. Collision insurance
This add-on covers your car in the event of any damage that you’re responsible for. Liability insurance covers the other people’s property and cars in an accident for which you are held liable. It doesn’t cover your car. This may therefore seem like a good idea at first. This will depend on how much it would cost to replace your car. Paying this premium may cost you more than the cost of the car. However, if you’re leasing a car or are still paying a car loan, then it is a good idea to have this add-on.
3. Accidental death or funeral insurance
If you already have a life insurance policy, then this would be an unnecessary expense. Your life insurance policy will take care of these expenses by sending the money directly to the funeral home. Your life insurance policy covers the expenses whether your death occurs in a car accident or not.
4. Emergency assistance
If you already belong to AAA or any other such organization, then you don’t need this add-on. You will have coverage for roadside assistance and towing.
It’s important to have car insurance not just because it’s a legal requirement, but also because it ensures you’re covered in case of an accident or mishap while driving. However, always think twice when considering add-ons. You may be wasting money on coverage that you already have.