How to Decide If You Need Car Insurance Riders


Car insurance policies include coverage for bodily injury, personal property, and in most cases, uninsured motorists; they protect against an at-fault accident up to a maximum payout. In addition to the standard inclusions you have the option of adding riders, which have specific benefits but raise the cost of the policy.

The question then becomes: Are insurance riders worth the extra cost?

Towing and Labor

Towing coverage will move your vehicle from the site of the accident to the repair shop of choice, your home, or other location within mileage limits set by the policy. In many cases you, will have coverage through the vehicle warranty or a third-party provider like AAA, eliminating the need to by the rider.

Rental Car or Alternate Transportation Coverage

Losing the use of your vehicle while you wait for repairs can create transportation issues. A rental car rider provides a vehicle up to a set daily limit and maximum rental time. Households with multiple cars may not need a rental car in the event of an accident.

Medical Payments

The medical payments benefit pays medical bills up around $2,000. It is a useful rider if you need help paying deductibles and co-payments for unexpected doctor visits. In most cases, health insurance policies will pay the bulk of incurred medical bills.

Discount Protection for No Claims

Companies can reward you for not making a claim. The no claims bonus will either discount your renewal rate or offer a bonus check when you do not file a claim during the policy period. You can build up the discount over multiple years to increase savings. No claims bonuses offer up to an 80% discount.

Accident Forgiveness

The rider can prevent large premium spikes after an accident. Insurance companies offer a rider, which will keep rates steady, even after a claim. There are restrictions on the rate lock, which address the number of claims and payout amounts.

New Car Replacement

A car accident, which results in a totaled vehicle, could leave you without enough to pay off the current loan. New car replacement promises to replace the vehicle with a similar model. One of the challenges with buying a new car is the rapid depreciation in the first year. In some cases, they will provide a car that is one year newer than the wrecked vehicle.

Vanishing Deductible

Vanishing deductibles reduce the policy deductible by $50 to $100 every year you do not make a claim until it reaches $0. Then when you do file a claim, you have less money out of pocket to pay for repairs.

Gap Insurance

Primarily designed to protect car loans, the policy will pay off the loan, even if the value of the car is less than the amount owed. With more buyers trading in cars and rolling over unpaid balances, Gap insurance can be a safety net in the event of a total loss due to an accident. Insurance companies assess a vehicle’s value based on standard valuation tables. Gap insurance will pay the “gap” between the insurance payout and the loan amount owed on the car.