What’s really behind all those car insurance commercials on TV and the Internet? When it comes to advertised insurance features, determining which benefits you need can be a challenge – particularly if you are misled into believing a particular benefit is only available from one insurer when similar benefits are actually available from other companies, too. In this two-part post, we will explore some of the most frequently advertised insurance features and what they could mean for you.
Safe Driver Bonus Check
There is no question that Allstate has made an effort to promote the Safe Driver Bonus Check, which promises to send drivers a check every six months they go without an accident. The check is simply a reimbursement of a portion of the premiums paid during the policy period – usually an amount up to 5 percent of the total premium.
Of course, getting a check mandates participation in the Your Choice Auto Program, which requires drivers to have good credit scores and a clean driving record at the time of enrollment. It also requires drivers to maintain a good driving record for the duration of the policy period or else forfeit the reimbursement.
Alternatively, drivers could simply purchase coverage from an insurance company that offers premium discounts upfront rather than offering reimbursement at the end of the policy period. Nearly all insurance companies offer some form of safe driver discount so long as you remain accident-free.
Name Your Price Tool
The Name Your Price Tool was made famous by Progressive Insurance commercials, which advertises the ability to tell Progressive want you want to pay, and they will build a policy designed to meet your budget. However, the Name Your Price Tool comes with a big catch: You must reduce or eliminate important coverage to achieve your preferred price.
Imagine saving $20 per month on your car insurance premium only to find out you took a big cut in liability protection you will need later on. The small upfront savings ends up costing you tens or even hundreds of thousands of dollars in financial damages. That’s why we suggest leaving name-your-price tools to the travel websites. Instead of stripping away the protections in your insurance policy, talk to an independent agent here at Killey Insurance about other ways you can save on coverage. We can shop around for car insurance from multiple carriers – not just one – to find competitive rates and discounts on the coverage you need.
You probably don’t hear much about GAP coverage in insurance commercials, but it is still worth mentioning as an advertised insurance feature. New vehicles tend to depreciate quickly, often creating a loan balance that exceeds the actual cash value of the car. Since standard car insurance coverage only covers the actual cash value, an accident could leave you with a loan balance even after insurance pays for your totaled car. In this scenario, GAP insurance helps bridge the gap by paying off the remainder of the loan so you can start anew.
Lenders and car dealers typically pitch GAP coverage when you finance a new vehicle, and they usually offer to tack on the premium all at once to the balance of the loan. The cost for this coverage can vary, but it is often as much as $400 or more for premiums that cover the life of the loan. Since loan balances eventually catch up with vehicle valuation, however, you may not need the GAP protection in the final years or months of your loan.
Before you purchase coverage from a dealer, consider that some car insurance companies sell GAP coverage, too. They also allow you to drop the coverage if you no longer need it, meaning you will only pay for the coverage you want. Talk with an agent here at Killey Insurance to find out which GAP coverage option is right for you.
Bundle and Save
If you bundle multiple lines of coverage with the same insurance company, you may be able to save money on your premiums. Progressive is just one of several insurers that advertises discounts for customers who insure their homes and autos with the same company. Nearly all insurance companies offer discounts for home and auto or renters and auto combinations, but only certain ones will offer discounts for other types of coverage, such as RV and motorcycle insurance.
Continue reading part two of our post, Advertised Insurance Features.