We continue with Part Two of our post, Advertised Insurance Features.
Safe Driving Bonus Check
If you are a safe driver, you should be rewarded for your good habits behind the wheel. Most insurance companies offer special discounts for policy-holders with clean driving records. Recently, however, Allstate’s Safe Driving Bonus Check has garnered a lot of attention thanks to frequent commercials advertising the benefit. The company rewards safe drivers with a check every six months they stay accident-free. However, this benefit may not be as valuable as it seems.
To get a Safe Driving Bonus Check, you must have a good driving record and pay extra to enroll in a qualifying tier of Allstate’s Your Choice Auto Program. Next, you must remain accident-free for the duration of your policy period to get the check. Finally, your check will be capped at a maximum of five percent of your total premium. In other words, a $600 policy would give you a maximum of $30 every six months.
While getting a check may seem appealing, keep in mind that you must pay extra for this program. Also, several other insurance companies offer similar versions of this benefit, and some of them even offer it at no additional charge. Depending on the insurer, you may qualify for an upfront discount on premiums, or you may experience diminishing deductibles and/or premiums over time.
If you cause an accident, chances are your insurance premiums are going to rise. However, Allstate regularly advertises its Accident Forgiveness program, which promises to overlook a first time accident. Like the bonus check feature, you must be enrolled in the Your Choice Auto Program to get Accident Forgiveness. This, of course, comes at an additional cost that varies depending on which version of the program you choose.
If you prefer knowing your rates won’t go up just because of an accident, Accident Forgiveness could be right for you. However, you should note that this type of protection is available from multiple insurers besides Allstate, sometimes at no additional cost. Acuity, Progressive, Nationwide, The Hartford, and Liberty Mutual are just a few examples of insurance companies that offer some version of Accident Forgiveness. Customers who choose Integrity Insurance may even qualify for free accident forgiveness after five years.
New Car Replacement
If you total your brand new car, it is unlikely your insurer will pay enough to purchase another one. That is because insurance companies typically pay for total losses based on the actual cash value of the vehicle, not the cost to buy one new. With New Car Replacement, you are guaranteed a brand new replacement vehicle if you total your new vehicle in the first year of ownership before its odometer reaches 15,000 miles.
Liberty Mutual is well-known for its new car replacement commercials, but several other insurers also offer similar benefits. With some, the coverage may even extend to cover a ‘better’ vehicle to replace used cars, or in the case of Travelers Insurance, a brand new car to replace your vehicle if it is totaled within the first five years of ownership.
Totaling your car is an unfortunate event, but the damage is compounded if you still owe a balance on your car loan. That’s because the loan balances on new cars are often much more than the depreciated value of the car, leaving a big financial gap in your insurance reimbursement. GAP insurance is designed to pick up where your primary auto coverage leaves off, paying off your vehicle loan and allowing you a fresh start.
Many drivers purchase GAP insurance, but they often do so from the wrong source. Lenders and car dealerships often sell the coverage and offer to tack hundreds of dollars in premiums to the loan. The problem is GAP insurance is only necessary so long as your loan balance exceeds the value of your vehicle. Once you pay down the loan, usually within the first few years, you no longer need the coverage that you paid for.
Instead, we recommend working with an independent agent here at G&L Insurance to shop and compare rates on GAP coverage from traditional insurers. By adding this coverage to your insurance policy, you pay only for the protection you need and can drop the coverage once it’s no longer necessary.
Remember, many different insurance companies are competing to get your business. Always work with an independent agent to better understand advertised insurance features and which ones are right for you.