Additional Auto Coverage

Insurance companies offer additional optional coverage at what appears to be a small fee. It is important to review the coverage and what is being charged to decide whether to accept or reject the coverage.

Towing coverage pays your tow bill from the accident scene to the body shop. Towing coverage does not cover mechanical breakdown. Most towing coverage has a limit of up to 100 miles from your home. Therefore, if you are far from home, you may be required to pay for any additional charges over 100 miles. However, studies show that the majority of automobile collisions occur less than 1 mile from your home. Depending on the damage to your vehicle and the type of tow truck needed to tow your car, tow bills can run in excess of $200.00.  In that towing insurance is relatively inexpensive, it may be wise to spend a few dollars in order to save a few hundred.

Medical Payments coverage pays the portion of your medical bills which your PIP coverage is not required to pay. Personal Injury Protection or “PIP” is required to pay 80% of your medical bills, up to $10,000.00. Medical Payments (Med Pay) coverage pays the additional 20% not paid by PIP, as well as any medical bills over the $10,000.00 in coverage, up to the limits of your Med Pay limits.

Medical Payments coverage can be expensive. A less expensive alternative is using your health insurance if you are fortunate to have health insurance. If you are involved in an automobile crash, you are required to first submit your medical bills to your automobile insurance company. However, after your PIP coverage what it is required to pay, you are allowed to request that your medical provider submits the unpaid portion to your health insurance. If the medical provider accepts your health insurance, they are contractually obligated to submit your balance to your health insurance company. Usually, the amount paid by your PIP coverage is more than what your medical provider would have received from your health insurance. As such, your medical provider will sometimes agree to waive their balance.

Rental Reimbursement coverage pays your car rental bill when your vehicle is being repaired. Most rental coverage has a limit as to daily cost, as well as an amount of days coverage will be provided to you. Some insurance companies are allowing you up to $100.00 per day for a rental car for up to 30 days. However, this can cost you and additional $100.00 per year. Since most rental companies charge $45.00 or less for more than adequate transportation, you may want to consider limiting the amount of daily coverage you are purchasing to lower your premium.

Lastly, some insurance companies sell mechanical breakdown coverage in the event your car has a defect in the vehicle. This coverage is similar to an extended warranty. If you are leasing a vehicle or do not plan on keeping the car for an extended period of time, this coverage may not be necessary for you. However, if you like to keep your car for a long time, you may want to elect to purchase this coverage. The mileage limitation is usually 100,000 miles.