Radio, television, and Internet ads are filled with insurance companies touting some ‘special’ benefit they say sets them apart from the rest. The commercials make it seem like these benefits are only available from the company advertising them when that simply is not the case. In fact, many ‘special coverages’ are unique only in name – not in their actual benefits. In this post, we will review some of the most commonly advertised insurance features and what they really mean for you.
If you or a driver on your policy has ever been at-fault for a car accident, chances are you have seen first-hand the financial impact it can have on your premiums. Perhaps that is why Allstate’s ‘Accident Forgiveness’ commercials are so appealing. After all, it sounds pretty good to avoid paying more for coverage just because of a first-time accident.
However, it is not just Allstate that offers this benefit to policy-holders. It goes by different names from other companies, but you can find benefits similar to Allstate’s ‘Accident Forgiveness’ from a handful of other companies like Acuity, Nationwide, Travelers, The Hartford, Liberty Mutual, Nationwide, and Progressive. The added costs vary between companies, although Integrity Insurance offers it for free for policy-holders who have been with the company for five years or more.
Bundle and Save
Insurance companies like to reward loyalty. They know that most drivers also have more than just a car to insure; many also have homes, RVs, personal belongings, or even another vehicle to insure. To get more of your business, insurance companies offer discounts for purchasing multiple lines of coverage from the same company. Progressive is well known for their ‘Bundle-and-Save’ commercials, but they are not the only company offering extra savings. In fact, nearly all insurance companies provide discounts for multiple coverage lines – specifically for home and auto or renters and auto. Some will also offer discounts for bundling additional coverages, such as RV and motorcycle insurance. This ‘bundling’ discount is usually applied automatically and at no additional charge.
Name Your Price Tool
The ‘Name Your Price Tool’ is intriguing for many drivers – especially cost-conscious drivers looking to stay within their budgetary confines. Progressive began marketing this ‘tool’ to customers as a way to attract business, but it is really more a disservice than a benefit. That is because it prioritizes price over coverage and reduces or eliminates coverage in an effort to achieve a lower premium. Ultimately, this puts the policy-holder at-risk of being under-insured for future losses.
Instead, we recommend working with an independent insurance agent who understands the amount of coverage you need. We shop and compare rates on your behalf to find the best possible value.
The ‘Discount Double Check’ is a marketing phrase used by State Farm to suggest that other insurance companies may be overlooking valuable discounts that might otherwise save you money. The truth is that any insurance agent can double-check for discounts on your policy, but only an independent agent can check for discounts from multiple companies – not just one. You could go straight to State Farm to double-check for discounts from them, or you can use an independent agent who could double-check for discounts from multiple companies.
Safe Driver Bonus Check
When Allstate began advertising their Safe Driver Bonus Check, safe drivers everywhere took notice. After all, who wouldn’t want reimbursement from their insurer at the end of each policy period? However, this benefit is only available with enrollment in the Your Choice Auto Program, which requires drivers to have a clean driving record, as well as good credit. Then, drivers must remain accident-free to enjoy its benefits, which typically equal a reimbursement of up to 5 percent of premiums at the end of the policy. For example, if your premiums are $540, you may receive a reimbursement check of up to $27.
Though the ‘Safe Driver Bonus Check’ has been popularized by Allstate, several different companies are offering similar benefits for safe drivers. For example, some companies offer instant discounts instead of reimbursements, while others provide gradually decreasing premiums for each policy-period without an accident.
GAP insurance is often pitched to customers when financing a vehicle. This coverage is designed to pay the difference between the depreciated value of the vehicle and the actual balance of the car loan when a vehicle is totaled in an accident. This helps ensure the loan is paid in full even if the primary car insurance does not provide adequate reimbursement to cover the balance.
For example, many brand new vehicles lose a tremendous amount of value in the first year of ownership. If you finance a car with little or no down payment, the amount you owe on your vehicle after the first year could be much more than what it is actually worth. If you are in an accident that totals your vehicle, GAP coverage will pay the difference.
While GAP protection is financially beneficial coverage, be careful spending hundreds of dollars on it from your lender or the car dealership. Doing so ensures you pay for GAP coverage for the entire length of your loan – not just during the first couple of years when the balance of your loan exceeds the value of your car. By purchasing GAP coverage from your car insurer instead, you can drop your coverage if you no longer need it, potentially saving you money.
GAP coverage comes in different forms and by different names from company to company. The cost can also vary, although it may be included by default under certain types of coverage, such as Traveler’s ‘Drive New Car Coverage.’
New Car Replacement Coverage
You’ve probably seen the Liberty Mutual commercials on TV where disgruntled drivers complain about insurers that pay only for a totaled vehicle’s actual cash value – not the cost to replace the car with a new one. They claim that with Liberty Mutual, they could have been reimbursed for the cost of a new car instead of the depreciated value of their old one.
The truth is Liberty Mutual is not the only company that offers new car coverage. Depending on the insurer, new car replacement may pay for a brand new vehicle of the same make and model or perhaps one of the same model year (or one year newer) in the case of a used car. Some companies also throw in extra benefits. For example, Traveler’s Insurance offers new car replacement if you total your brand new vehicle within the first five years of ownership. Talk to an independent agent at Harnish Insurance to find out more about new car replacement benefits and whether it could be right for you.
No one wants to be stranded on the side of the road. Perhaps that is why Liberty Mutual has been advertising its Roadside Assistance benefit, which promises to be there 24-hours a day in the event you run out of fuel, lock yourself out of your vehicle, need help changing a flat tire, or perhaps even need a tow. While we recommend roadside assistance for drivers, it is important to note that all insurance companies offer some form of this coverage, although benefits may vary. Talk to your agent for help determining which roadside assistance program may be right for you.
As you can see, there is a lot of hype in the average car insurance commercial. A local independent insurance agent can explain the truth about advertised insurance features and help you save time and money shopping for the benefits that matter to you most.