How many car insurance commercials do you hear each day? Have you ever noticed that every insurer seems to offer a different ‘special’ benefit to drivers who enroll in coverage? In today’s post, we will discuss several frequently advertised insurance features and whether they really are as exclusive or beneficial as insurance companies seem to claim.
Accident Forgiveness is one of Allstate’s advertised features. By giving this benefit a name, it becomes more recognizable and easier to market. However, Accident Forgiveness is not an automatic feature included in all car insurance policies from this carrier. Instead, drivers must opt to enroll in this extra protection, which assures that premiums will not go up after a first-time at-fault accident.
Fortunately, Allstate is not the only company that thinks Accident Forgiveness is a good idea. In fact, several different insurance companies do not think a first-time accident is necessarily a good predictor of future claims. Of course, most of them charge drivers for enrolling in this optional protection, although Integrity Insurance offers it free of charge to customers who have been with the company for at least five years.
Safe Driver Bonus Check
Another well-known Allstate benefit, the Safe Driver Bonus Check reimburses drivers for up to five percent of paid premiums when they remain accident-free for each policy period. To qualify, drivers must have good credit, a clean driving record, and enroll in Allstate’s Your Choice Auto Program.
While many drivers enjoy getting a check every six months, there is no need to wait for the savings with other insurers. Most companies are willing to extend discounts to safe drivers so long as they remain accident-free. This allows for upfront savings – not reimbursements that are contingent on meeting a safe-driving standard for the entire policy period.
Name Your Price Tool
Progressive popularizes the Name-Your-Price Tool and aims it at drivers who want to save money on car insurance. Simply enter the amount you want to pay for coverage, and Progressive will build a policy with suggested coverages that you can modify or eliminate altogether. At first glance, it seems like a good idea – especially to cost-conscious drivers who prioritize getting a good value from their coverage. However, this advertised insurance feature can leave major gaps in coverage for unsuspecting drivers who may not be fully aware of their exposure to risk.
Instead of removing or reducing coverage, always talk with an independent insurance agent here at Neeley Insurance when you are looking for ways to save money on car insurance. We shop and compare rates from multiple insurers until we find a policy that meets your needs and budget.
Insurance companies do not as frequently advertise GAP coverage as other types of insurance benefits, but it is still worth noting in our list. That is because car dealers and lenders often pitch this coverage when you purchase and finance a new car. Typically, you pay as much as $400 or more to implement this coverage, which promises to pay the difference between the balance of your car loan and the depreciated value of your vehicle that your insurance company reimburses you for.
GAP coverage is especially beneficial to buyers who finance brand new vehicles or who put little or no money down on their purchase. In these scenarios, the depreciation rate of the vehicle often outpaces the pay-down rate of the loan, leaving borrowers ‘upside down’ in their purchase. However, balances usually catch up to loan value after a few years, eliminating the need for GAP coverage. That is why we typically recommend purchasing GAP protection from an insurer instead of a lender or dealer. With an insurer, you can cancel unwanted GAP protection when you no longer need it instead of paying upfront for years of coverage you may not need from the lender or dealer.
Continue reading part two of our post, Advertised Insurance Features.