Optional Car Insurance Coverages: Are They Really Optional?

Posted By: Team Moody,

Although most states require a minimum limit of Auto Liability insurance, minimum coverage may not provide adequate protection for you, your family, and your personal assets in the event of an accident. A worldwide car insurance agent can help with your specific needs to determine the liability limits that best fits you. 

Here are some of the optional forms of personal automobile insurance coverage, and the protection that they can offer.

Towing & Labor

This coverage pays for towing and labor costs each time your car is disabled. The last thing you want to do when you’re stranded on the roadside is panic about how expensive the breakdown might be. That’s where a common add-on to your auto insurance policy can help. Towing and labor cost coverage is an optional coverage that you can add to your policy that typically protects you against some of the costs and hassles associated with common roadside breakdowns like dead batteries, flat tires or even an embarrassing lockout. The exact services offered will vary, but they may include the following: 

  • Towing
  • Tire changes
  • Jump starts
  • Lockout assistance
  • Gas or oil delivery

The “labor cost” generally refers to labor charges you may incur at the scene of the breakdown to get your vehicle up and running. Towing and labor cost coverage often can help when you’re in a variety of situations, like when you’re stuck in the snow, have a dead battery, or have run out of oil. 

Rental Reimbursement

This pays for the cost of renting a car when your car is damaged by a situation covered by comprehensive or collision coverage, and when your car is out of commission for more than 24 hours.

It will cover the cost of a rental car while your vehicle is being repaired after an accident. Rental coverage will help with the cost of a rental car as part of a covered auto insurance claim. Speak to your worldwide car insurance agent for more specific details. 

Gap Insurance

For newer cars, gap insurance is meant to pay the difference between the actual cash value of your car at the time of the accident and the amount you actually owe on the lease or loan.

When you purchase a new vehicle, it begins to depreciate in value the moment it leaves the car lot. In fact, most cars lose 20 percent of their value within a year. When you finance the purchase and put down a small deposit, in the early years of the vehicle’s ownership the amount of the loan may exceed the market value of the vehicle itself. In the event you badly damaged or total your car, gap insurance covers the difference between what a vehicle is currently worth and the amount you actually owe on it.

Consider purchasing gap insurance for your  vehicle if you:

  • Made less than a 20 percent down payment
  • Financed for 60 months or longer
  • Leased the vehicle (carrying gap insurance is generally required for a lease)
  • Purchased a vehicle that depreciates faster than the average
  • Rolled over negative equity from an old car loan into the new loan.

Technically, all of these car insurance coverages are completely optional. You can get behind the wheel and take a road trip right now without any of them. However, think of everything that could possibly happen on the road. Would you want to face that without proper coverage?

About Moody Insurance Worldwide

Moody Insurance Worldwide, a division of Moody & Associates that was founded in 1914, is a leading provider of risk management programs and insurance coverage to individuals and businesses across the East Coast. We write all sizes of businesses, with technical expertise in many key industry areas, and provide personal insurance programs for estates and high net worth individuals. Our licensed, experienced commercial account managers can work with you to determine the coverage that you need at a competitive rate. Contact us today at (855) 868-0170 to learn more about what we can do for you.