Budget Concerns: How Much Insurance is Enough?

The Little-Known Auto Insurance Coverage That You Can't Do Without

15 June 2015

Dustin Duncan

There is no doubt that your vehicle insurance provider has plenty of policy options to choose from—but are you really getting everything you need for a well-rounded policy? Most people have liability, comprehensive, and collision coverage today. It is natural to assume that those types of coverage will provide for you in just about any accident or disaster involving your vehicle. However, there are a couple of little-known types of coverage that you may not have. The types of coverage discussed below are essential if you want an auto insurance policy that truly covers everything.

Uninsured/Underinsured Driver Insurance

While the number of uninsured drivers is declining, the most recent numbers available still indicate that there were about 29.7 million drivers on the road without insurance in 2012. There are also many people who purchase only liability coverage in the amount of their state's minimum requirements. This liability may simply not be sufficient when that driver causes serious damages, however. Both underinsured and uninsured drivers pose a significant risk to you, because your standard insurance policy typically doesn't cover damage caused by these drivers.

You can get a policy supplement known as uninsured/underinsured coverage that will cover the damages that one of these drivers may cause to your vehicle, you, or your passengers. This is usually not an expensive addition to the policy, and it is well worth the small investment when a driver with no insurance or little insurance wreaks havoc.

Rental Reimbursement Insurance

Your insurance agent probably offered a policy supplement known as rental reimbursement to you, but you may have turned it down because you don't travel or rent vehicles very often. In fact, the name of this policy supplement can be a little bit confusing. It's actually meant to help you after you're in an accident.

In any situation where your vehicle sustains enough damage to need a major repair, you will lose use of that vehicle for days or even weeks. This is a serious inconvenience, but the rental reimbursement coverage will alleviate that issue by providing you with the funds for a rental car for every day that you're without a vehicle.

If your vehicle is destroyed and then declared a total loss by your insurers, you'll be without a vehicle until you can find a new one. The rental reimbursement will provide you with rental vehicle funds while you search for your new vehicle. The total length of rental reimbursement can vary by policy, but each policy does have a cap. For example, a policy may state that rental reimbursement will provide rental funds for up to 30 days in the event of a total vehicle loss.

Your standard auto insurance doesn't cover rental reimbursement. Like uninsured/underinsured coverage, it's a small investment that you'll be glad you made if you're ever in a wreck. Both of these coverage types may not be widely known, but they can be absolutely essential if you want the best coverage. Ask your insurance agent about adding this coverage to your policy—for more information, visit http://esiinsurance.com/.

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