Auto Insurance Add-Ons: What You Need To Know

Supplemental auto insurance is an optional add-on to a standard auto insurance policy that provides additional coverage for specific scenarios. While the minimum level of auto insurance is legally required, it may not cover all costs related to car damages and repairs, leaving drivers exposed to financial risk. Supplemental insurance allows consumers to customise their coverage based on their unique needs, filling gaps in their standard insurance policy.

Uninsured/Underinsured Motorist Coverage

Uninsured motorist coverage is mandatory in many states and highly recommended for all drivers. It covers both bodily injury and property damage resulting from an accident with an uninsured driver. Underinsured motorist coverage, which is usually offered alongside uninsured motorist coverage, provides protection if you're hit by a driver whose insurance coverage is insufficient to pay for the damages or injuries they caused.

Depending on your state, uninsured/underinsured motorist insurance may be separate or combined, and it can consist of up to four coverages:

• Uninsured motorist bodily injury (UMBI): This coverage pays for medical bills for both you and your passengers if you're hit by an uninsured driver.
• Uninsured motorist property damage (UMPD): This coverage pays for damage to your vehicle caused by an uninsured driver.
• Underinsured motorist bodily injury (UIMBI): This coverage pays for medical bills for you and your passengers if you're hit by a driver with insufficient insurance.
• Underinsured motorist property damage (UIMPD): This coverage pays for damage to your vehicle if the at-fault driver's insurance is not enough.

It's important to note that uninsured/underinsured motorist coverage may not include a deductible, but some states may require a deductible for UMPD/UIMPD. Additionally, this coverage typically extends to hit-and-run accidents, providing financial protection in situations where the at-fault driver cannot be identified.

When considering uninsured/underinsured motorist coverage, it's essential to review your own insurance policy and understand the limits and exclusions. While this coverage is a valuable addition, it may not be necessary if your existing policy already includes sufficient protection for medical expenses and vehicle repairs.

In conclusion, uninsured/underinsured motorist coverage is a crucial aspect of supplemental auto insurance, offering financial protection and peace of mind in the event of an accident with an uninsured or underinsured driver. By understanding the specifics of this coverage, you can make an informed decision about your insurance needs and ensure you have the right protection in place.

Personal Injury Protection

Supplemental auto insurance allows consumers to customise their coverage based on their unique needs. Personal Injury Protection (PIP) is one type of supplemental auto insurance.

PIP, also known as no-fault insurance, helps cover expenses like medical bills, lost wages, or funeral costs after a car accident, regardless of who is at fault. PIP covers medical expenses for the driver and their passengers, and can also help cover health insurance deductibles. If you are injured and unable to work, PIP can help cover lost wages, even if you are self-employed and need to hire temporary workers. PIP can also help pay for services you would normally perform, such as childcare and housecleaning, if you are injured and unable to do so. In the unfortunate event that you pass away in an auto accident, PIP can help replace lost income for your surviving dependents and pay for funeral, burial, or cremation expenses.

PIP requirements vary from state to state. In states with no-fault insurance laws, all drivers must purchase PIP as part of their auto policies. In other states, PIP insurance is optional, but it is still highly recommended. For example, in Texas, insurers are required to offer a minimum of $2,500 of PIP insurance, and drivers must submit a written waiver if they want to decline the coverage. While PIP is not mandatory in Texas, it is important to consider that without it, you could be left footing serious medical bills if you are ever in an accident.

Non-Owner Auto Insurance

Non-owner insurance policies tend to be less expensive than standard car insurance policies. These policies usually include uninsured/underinsured motorist protection and medical payments or personal injury protection. They do not include collision or comprehensive insurance, which pays for repairs or replacement of the insured's vehicle.

When considering non-owner car insurance, it is important to assess your driving habits and needs. If you rarely drive or only borrow a car from someone in your household, this type of insurance may not be necessary, as you may already be covered under the vehicle owner's policy.

Comprehensive and Collision Insurance

Comprehensive insurance covers damage to your vehicle from unexpected non-collision incidents. This includes theft, animal damage, falling trees, and weather damage. It also covers non-crash damage such as fire, flood, vandalism, hail, and natural disasters.

Collision insurance, on the other hand, covers damage to your vehicle resulting from a collision with another vehicle or object. This includes accidents with other vehicles, single-car rollovers, and accidents with stationary objects.

Both types of insurance are important supplements to liability insurance. While liability insurance covers damage to other vehicles, comprehensive and collision insurance cover damage to your own vehicle. They are often sold together as a package by auto insurers.

The cost of comprehensive and collision insurance can vary depending on the insurer, your location, the value of your vehicle, and other factors. You can choose different deductibles for each type of coverage, but having the same deductible for both can make it easier to predict your out-of-pocket costs.

When deciding whether to purchase comprehensive and collision insurance, consider the value of your vehicle and your ability to pay for repairs or a new car if needed. For older vehicles, the cost of this insurance may outweigh the potential payout in the event of an accident.

Additional Liability Coverage

Supplemental auto insurance allows consumers to customise their coverage based on their unique needs. While liability coverage is legally required in most US states, the actual required amount is quite low. This is where additional liability coverage comes in.

For example, if you rent a car from Hertz and injure another driver in an accident, your rental additional liability coverage may pay the other driver's medical costs of up to $100,000, and you won't need to report the claim to your insurance company.

In the US, additional liability coverage usually covers claims made in the US or Canada, but not in Mexico. It also does not cover bodily injury to the insured or property damage to the rental vehicle.

Frequently asked questions