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We all want to keep our car insurance costs down, but sometimes spending a bit more for extra coverage could save you money in the long run. Beyond the standard auto insurance your state, auto lender or leasing company may require, consider these 14 car insurance add-ons to increase your coverage.
What Is a Car Insurance Add-On?
Car insurance add-ons are optional types of coverage you can buy to supplement a standard auto insurance policy. Sometimes called endorsements or riders, add-ons usually increase your insurance premiums, but could ultimately save you money if you have a claim. For instance, if you need to rent a car for two weeks while yours is repaired due to a claim, an add-on that covers the rental cost could save you hundreds of dollars.
To understand add-ons, you first need to know what standard car insurance covers.
- Liability insurance, required by law in most states, covers injuries or damage you cause to other people or their property.
- Uninsured/underinsured motorist coverage coverage is required in many states. It covers damage to your car and injuries to you and your passengers if an uninsured or underinsured driver causes an accident.
- Personal injury protection (PIP) and medical payments insurance cover the cost of injuries to you and your passengers, regardless of who is at fault. PIP also covers lost wages due to a covered accident. PIP is required by law in no-fault states; some states require medical payments coverage.
If your car is leased or financed, the leasing company or lender typically requires you to carry the following types of insurance:
- Collision coverage pays to repair or replace your car due to a collision.
- Comprehensive coverage pays to repair or replace your vehicle due to theft, vandalism or damage unrelated to a collision, such as a hailstorm.
A policy including all of the above is considered comprehensive car insurance—but even comprehensive insurance doesn't cover everything. That's where add-ons come in.
How Auto Insurance Add-Ons Work
You can generally buy add-on car insurance at any time simply by calling your insurance agent or insurance company's customer service number. Changes typically take just a few minutes and go into effect right away. Charges are usually prorated—for instance, if you buy an add-on three months before your policy renews, you'll be charged for three months' worth of add-on coverage.
Add-ons to your car insurance typically renew automatically with your policy. If you no longer want an add-on, contact your insurance company to cancel the coverage. You'll generally receive a prorated refund or credit to your account.
To find out what add-ons your current car insurer offers, visit the company's website or call your insurance agent. You can investigate other insurers' add-ons by visiting their websites or contacting the companies.
14 Car Insurance Add-Ons to Consider
Here are some additional car insurance coverage options to consider.
1. Gap Insurance
If your leased or financed car is totaled in an accident, insurance pays out the car's value—which might not be enough to pay off your loan or lease. Guaranteed asset protection (gap) insurance covers the difference between your loan or lease balance and the vehicle's value, potentially saving you thousands of dollars. You typically need collision and comprehensive insurance to purchase gap insurance, which is sometimes called loan/lease coverage.
2. New-Car Replacement Coverage
New cars lose about 20% of their value the first year, according to Kelley Blue Book. If your new car is totaled, the payout typically isn't enough to replace it. New-car replacement covers the cost of replacing your car with a new vehicle of the same make and model if your car is totaled within a certain number of miles or years.
3. Better-Car Replacement Coverage
Going one step further than new-car replacement coverage, better-car replacement coverage pays to replace your totaled car with a car of the same make and model that's one model year newer.
4. Roadside Assistance Insurance
Roadside assistance provides an app or toll-free number you can call to get help when you're stranded on the road. This coverage typically provides services like towing, tire changes, jump starts, emergency fuel delivery or lockout services and pays part of the cost. It's sometimes called towing and labor cost coverage.
5. Trip Interruption Insurance
Trip interruption coverage helps cover the cost of lodging, alternative transportation and food if your car breaks down while you're traveling a certain number of miles from home. It may be included in roadside assistance plans or sold as an add-on.
6. Mechanical Breakdown Insurance
Similar to the extended warranty you can buy with a new car, this insurance covers a wider range of mechanical breakdowns than the standard new-car warranty. Your car must be within certain age and mileage ranges to buy this add-on. Keep in mind that, unlike an extended warranty, using your mechanical breakdown coverage generally requires paying a deductible.
7. Rental Reimbursement Insurance
Rental reimbursement coverage helps pay the cost of a rental car while your vehicle is in the shop for repairs after a covered accident. It typically lasts up to 30 days. Some plans let you rent a car from any company and get reimbursed. Other insurers have you use an approved rental company which they pay upfront.
8. Diminishing Deductible Coverage
Sometimes called vanishing or disappearing deductible coverage, this add-on gradually lowers your deductible based on how long you go without a traffic ticket or accident. For instance, your deductible might drop by $100 for every year you're incident-free. Keep up the good driving, and you could end up with a $0 deductible.
9. Accident Forgiveness Coverage
Accident forgiveness coverage means your insurance premiums won't go up after your first accident with an insurer, even if you were at fault. Insurance companies may award you accident forgiveness for free if you go a certain time without an accident, or may sell accident forgiveness as an add-on.
Learn more >> How Long Does an Accident Stay on Your Insurance?
10. Windshield/Glass Insurance
Replacing a newer car's windshield can cost $1,000 or more, according to Kelley Blue Book. Once the glass is replaced, cameras and sensors need recalibration so safety features like automatic braking work. Comprehensive insurance usually covers windshield replacement, but the cost of deductibles adds up. Some insurers offer add-on windshield and glass coverage that repairs or replaces auto glass with low or no deductible.
11. Original Equipment Manufacturer (OEM) Insurance
When your car needs repairs after an accident, your car insurance may only pay for generic auto parts. You can purchase OEM insurance to cover the cost of factory-original parts. OEM coverage is usually restricted to newer vehicles.
12. Customized Equipment Insurance
Standard car insurance typically doesn't cover repairing or replacing modifications to your vehicle such as turbocharged engines, custom paint jobs or high-end stereos. Customized car insurance can help ensure your vehicle is restored to its former glory after an accident.
Learn more >> Do I Need Special Insurance for My Modified Car?
13. Classic or Collectors' Car Insurance
Classic or collectors' cars may require specialized restoration expertise, antique parts or secure towing services that standard car insurance won't cover. Classic car insurance is available for cars that meet the insurer's age requirements and any other criteria, such as securely storing the vehicle or limiting mileage.
14. Rideshare Driving Insurance
Rideshare drivers are at risk anytime they're logged in to the rideshare app but haven't accepted a trip request from a passenger. Generally, neither your personal car insurance nor the rideshare company's insurance covers you during this period. Adding rideshare insurance ensures you and your vehicle are protected.
Learn more >> How to Make Money With Your Car
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Are Car Insurance Add-Ons Worth It?
To decide if car insurance add-ons are worthwhile, weigh the cost of the add-on coverage against the potential cost of going without. If you're a rideshare driver, skipping rideshare insurance essentially means you're uninsured during part of your drive. Given the risk of medical bills, car repairs or lawsuits if you have an accident, you'll probably decide the extra cost of rideshare coverage is worth it.
On the other hand, some add-ons may be unnecessary. Can you borrow your spouse's car while yours is being repaired? Do you already have roadside assistance through a credit card or auto club membership? Could you put the money you'd pay for windshield coverage into your emergency fund instead? Before buying add-on insurance, see what your existing auto policy covers and whether any deductibles apply to the extra coverage.
The Bottom Line
If your insurance company doesn't offer the additional auto coverage you want, shop around to see who does. While you're at it, get quotes from several car insurance companies to compare to your current provider. Experian's auto insurance comparison tool gathers quotes from over 40 top insurers in one place, so you can see if you're paying too much for car insurance.