Riders for Auto Insurance: Understanding This Type of Coverage

Everyone who drives should have access to good car insurance, whether you have a sterling record of no violations or accidents or you’ve picked up a few tickets and/or dents along the way. With the Internet at your fingertips, finding the best policies from the best carriers has never been easier, but understanding insurance company terminology can be confusing unless you have someone knowledgeable to explain it to you. A good insurance broker in the Triad area should be more than willing to do this to help educate you before you decide on the best options for your personal car insurance coverage.

Why the Confusion?

Car insurance terms like collision and comprehensive, deductible, depreciation, PIP, gap insurance and 25/50/25 can be confusing; however, with a little study, it can all become clearer. The most basic car insurance is the pure protection provided by liability coverage. This pays “the other guy” if you’re involved in a vehicle accident deemed your fault. Benefits include payments to help cover bodily injury and/or property damage done to another. All states in the U.S. require drivers to carry liability coverage.

Although not legally required, many policyholders will typically consider adding collision coverage, which pays to repair damage to your vehicle as the result of it hitting something like a tree or another vehicle. Comprehensive, which is another option, pays for losses to your vehicle in other-than-accident scenarios. This could include:

• Vandalism
• Theft
• Fire
• Hail, flood or other storm damage

What Else Applies?

You may be offered a “boilerplate” auto insurance policy that includes liability, collision and comprehensive, but there are plenty of other options to consider. Some insurance companies may include certain of these options as part of their auto insurance products. Others will offer them in exchange for an additional premium amount. This may include uninsured/underinsured coverage, towing and roadside assistance, rental reimbursement, personal injury protection (PIP) and more.

What a Rider Adds

Riders (or endorsements) are add-ons to an auto insurance policy that either extend or decrease coverage. They’re ways to customize your car insurance policy. Some items typically found in auto insurance riders include:

• First accident forgiveness insurance
• Waiver of depreciation
• Rental car substitute
• Rental car insurance
• Family protection coverage

Policy riders generally add coverage to your policy, so their addition will mean higher premiums. If a rider is used to decrease coverage, premium amounts should go down.