When Buying the Cheapest Auto Insurance, Don’t Forget to Protect Your Assets

If you are looking for the cheapest auto insurance rates, you may be tempted to skip some optional forms of coverage. But when you buy auto insurance, you shouldn’t just look at your monthly premium as your bottom line. You should also try to think about the worst case scenario. How much could you reasonably afford to pay out of pocket if you were involved in an accident? What if the other driver wasn’t insured, or what if you were at-fault? There are a few optional kinds of coverage that you should consider carrying to avoid financial disaster.

1. Uninsured Motorist Coverage

According to the most recent statistics, approximately 1 out of 3 drivers does not carry insurance as required by law. So if you neglect to purchase uninsured motorist coverage and you are hit by another driver, there is at least a 33% chance that the at-fault driver won’t be able to cover the costs associated with your medical or legal expenses, or of the replacement of your vehicle.

Essentially, when you purchase underinsured coverage, your insurance company will cover all of your expenses if you are hit by a driver who doesn’t have a policy. Your insurance company will then go after the uninsured driver to recoup these costs. UM coverage can save you literally thousands of dollars and quite a few headaches if you are ever hit by someone who is driving without an auto insurance policy.

2. Loss-of-Use Coverage

What if you are involved in an accident and your car needs to be repaired? How are you going to be able to make your repairs and still get to and from work? If you are trying to cut corners when you buy auto insurance, you might be tempted to skip loss-of-use coverage. But this can save you hundreds of dollars, not to mention quite a bit of frustration, if your car is ever out of commission.

Loss-of-use coverage typically costs $30 per year, and will allow you to rent a car if your car is being repaired due to a covered loss. Compare that to the typical car rental rate of $30 per day, and you can see how the savings would quickly add up. In addition, you would save yourself the frustration of having to beg for rides or set up carpools, or having to take public transportation.

3. Car Towing Coverage

Also known as roadside assistance coverage, you might decide to forego this coverage when you buy auto insurance. But car towing can save a chunk of cash with just one use.

Most insurance policies only cover towing if it is necessitated by a car accident. But the optional towing coverage will cover the costs of a tow due to mechanical breakdowns, tire damage or flats, or simply running out of gas. Since the average cost of a tow is $2.50 to $3.50 per mile, not including the hook up fee, going for the optional tow coverage can save you hundreds if you need to have just one tow over the course of the year.

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