Car insurance has been essential to the driving man ever since cars became mainstream. No matter which state you are in, car insurance is necessary, mandatory, and very important for your medical, financial, and legal safeguarding.
Forty-nine states out of fifty have made it mandatory for drivers to have liability coverage with a coverage limit equal to or above the minimum coverage limit. So in case a driver gets in a car accident, both the drivers can get their medical treatments and the car repaired.
But just as there are different people with different driving preferences and vehicles, more than one-size-fits-all car insurance is needed to precisely cover the needs of some drivers. People want customizability and auto insurance policies that can be made according to their needs.
It is where car insurance endorsements come in. What are these, and how can they be used to offer tailor-made insurance coverage? Let’s take a look at everything you need to know about car insurance endorsements.
What is Car Insurance Endorsement
Car insurance endorsements are additional features that policyholders can add to their existing, active auto insurance policy to make it fitter for their needs. People use their cars for different reasons; some use them for commuting, while others like to take their vehicles to the most challenging terrain they can.
This different use case is what creates the need for modification in the basic car insurance policies. Think of it as this; when someone owns an average car but wants to ride it in a more challenging terrain, perhaps off-roading, they need to make some changes.
The standard tires are just fine to work in everyday conditions, but to climb a hill or cross a muddy road? It won’t work. So the driver can swap the standard tires for more rugged, off-road tires. The exact change can be made with car insurance policies as well.
The Basic Insurance Policies
Car insurance endorsements are almost always add-on policies, not standalone ones. It means that you must have the base policies to buy auto insurance endorsements. You need a car first if you want to purchase off-roading tires.
There are four fundamental policies that every driver either must have or should have to drive a car safely, securely, and legally. These policies are:
- Liability insurance
- Collision insurance
- Uninsured Motorist Coverage
- Personal Injury Protection plan
Liability insurance: Liability insurance is the most important auto insurance policy. This policy is used to cover the cost of repairs and medical treatments of the other driver in an accident that is your fault. It is mandatory in forty-nine states, and driving without one is a felony.
Driving without liability insurance would lead to legal and financial ramifications. Do not drive without liability insurance.
Collision insurance: Collision insurance is optional; people can choose to buy it or skip it. But despite being optional, it is imperative because this policy covers the cost of repairs to the policyholder’s car after an accident.
It does not matter whose fault the accident was; if the accident was due to a collision and it was unintentional, collision insurance can be claimed. This policy is also one of the most expensive insurance policies you can get.
If you want to save money, make sure you search for the best insurance company in your state. For example, if you live in Illinois, look for cheap Illinois car insurance companies and then select the one that offers the best coverage at the most affordable rates.
Uninsured Motorist Coverage: Uninsured Motorist coverage is mandatory in twenty states and optional in the rest. Policyholders can claim this policy when the driver at fault lacks liability coverage or is not present at the accident site (hit-and-run accident.)
Personal Injury Protection plan: Personal injury protection plan covers the cost of medical treatments needed after the car accident. It involves hospital bills, therapy bills, etc., and lost wages. PIP is mandatory in 12 states called the “No-fault states.”
Car Insurance Endorsement Options
Apart from having those as mentioned above optional and mandatory car insurance policies, you can add extra features to these policies to fit your needs. It does cost extra, but it can save you a lot of money if you get in an accident without these add-ons.
Let’s look at some widespread and ubiquitous auto insurance endorsements you can get and what additional features they offer.
Roadside Assistance
The most common car insurance endorsement is Roadside Assistance, and almost every major auto insurer offers it. Roadside Assistance adds extra features to your car insurance policies as the name suggests.
Roadside Assistance is recommended for people who travel on the road a lot. RSA comes with features such as:
- Winching
- Towing
- Tire change
- Refueling
- Battery jumpstart
- Unlocking the car
All these services can be availed anywhere you are, in the middle of the road (that’s the point of the add-on.)
Modified Car Coverage
Expensive music systems, engine upgrades, etc., cost a lot. When you own a car, you may decide to modify it. This modification increases the value of the vehicle.
Getting the modified car coverage will ensure that all the expensive added parts are covered in the insurance policy.
GAP insurance
GAP stands for Guaranteed Assets Protection insurance, and this policy add-on is for people who finance their cars. When you finance a vehicle, you pay more than the price of the car due to interest.
So what happens if your car gets totaled due to an accident or gets stolen before you have paid the entire loan amount to the bank? The insurance company will only give the actual cash value (which is lower than the MSRP of the car due to depreciation.)
It is where GAP insurance comes in. It covers the extra amount in case your car gets totaled or stolen to ensure you do not pay any money from your pocket.
Rideshare Insurance
Rideshare insurance is for people who want to use it for any ridesharing business. General car insurance policies do not cover the commercial use of the car. Insurance companies have the right to deny your claim if your vehicle gets in an accident while you are using it for commercial use.
Getting a commercial car insurance policy is expensive and not needed since the business is part-time.
Rideshare insurance allows you to switch your policy from general to commercial when you are using your vehicle for commercial purposes.
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Want to know what car insurance endorsements are? Take a look at the comprehensive article on everything you need to know about auto insurance endorsements.
