Why add-on insurance coverage options are worth the investment

Your current car insurance may not always cover you fully in an accident. Find out why add-on insurance coverage can give you some extra peace of mind when you need it.

Choosing car insurance can be daunting, especially when you want to make sure you're protected. Something like "full coverage" might sound like everything is covered, in every scenario. It's a common mistake. Truth be told, when people say "full coverage," usually they're talking about a policy with the basics — liability, collision, and comprehensive. That's a fairly well-rounded policy, but there could still be gaps in it that'll leave you hanging if you're ever in an accident (and statistics show you'll be in 3 or 4 in your lifetime).

That's why add-on insurance coverage options are worth considering (even if they're not required in your state). By investing a bit more in these "extras," you could save yourself from getting stuck on the side of the road. Or, worse, getting stuck with hefty bills if you're in an accident.

Six add-on insurance coverage options you may want to consider:

1. Personal Injury Protection (PIP)

Sounds pretty important, right? This coverage is meant specifically for drivers in "no-fault" states. In most of these states, you'll also be required to purchase Personal Injury Protection, or No-Fault Insurance Coverage to help cover your (and your passengers') medical bills and other losses (your liability insurance only covers people in the other car). This also goes toward meeting your health insurance deductible and paying for expenses that go beyond your health insurance coverage limits. Just keep in mind that PIP has coverage limits too. These policies typically cover other expenses and services related to being injured in a collision, like incurred childcare expenses.

Who needs it? Some states require PIP coverage. Even if you don't live in a no-fault state, you may want to consider PIP for extra protective padding. It could step in where your health insurance policy can't.

2. MedPay

Short for Medical Payment coverage, MedPay covers medical bills and other costs for you and your passengers if you're injured in an accident, regardless of fault. Sounds a lot like PIP, doesn't it? The difference is, MedPay is focused strictly on medical expenses, while PIP may also help with things like lost income, childcare, and other expenses that can build up as a result of injuries. Usually one or the other is offered depending on your state, so you probably won't need both PIP and MedPay coverage.

Who needs it? MedPay is required in just a couple of states. But even if it's not required in yours AND you have your own health insurance, MedPay could still help offset some expenses, like deductibles and copays. You might also want to consider it if you frequently drive with others in the car. Depending on your policy, your health insurance covers you and your family, but not other passengers.

3. Uninsured/Underinsured Motorist Coverage

You'd think you'd be off the hook if you're not at fault in an accident. Not always. Unfortunately, some people drive without insurance (or with very little coverage). That can be costly for you — particularly if you don't live in a no-fault state. In that case, if you're in an accident caused by an uninsured motorist, you might have to foot your own medical and repair bills.

Who needs it? Some states require uninsured/underinsured motorist coverage. Even if yours doesn't, it's worth looking into — especially if you live in a state with a high rate of uninsured drivers, like Florida (27 percent) or Mississippi (24 percent).

Graph: Do you need uninsured motorist coverage? Graph: Do you need uninsured motorist coverage?

4. Gap Insurance

If you just drove your new car off the lot, this one's for you. You may already have collision insurance to cover your own vehicle if you're in an accident. But the market value of your car doesn't always add up to what you owe on your lease or loan. If your car is worth less than what you currently owe on it, you may end up spending some money out-of-pocket to replace it after a collision.

Who needs it? Gap insurance is a smart option for drivers leasing or financing brand-new vehicles, as they depreciate at a faster rate. Once you owe less than what your car's worth, then you'll no longer need the extra coverage.

5. Roadside Assistance

No one is immune to the possibility of their car breaking down on the road. It could happen anywhere, at any time. Unless you're particularly handy under the hood, roadside assistance is a must. It includes towing services and repair — think, tire changes — on the road.

Who needs it? Some drivers already have roadside assistance through their credit card or AAA. But if you don't, it's a worthwhile add-on through your insurance company, especially if you often travel alone or with kids.

Graph: Do you need Roadside Assistance Coverage? Graph: Do you need Roadside Assistance Coverage?

6. Rental Car Reimbursement

Also called "transportation expense coverage," this'll cover you if you need to rent a car while yours is in the shop after an accident. Some repairs can take weeks, so this is definitely a valuable add-on if you're left carless after an accident.

Who needs it? If you only have one car and you live in a place without public transportation, consider Rental Car Reimbursement. It could save you thousands of dollars if your car ever ends up in the shop after an accident.

Add-on insurance coverage options may seem unnecessary at first glance, but they can be an important part of creating a true full-coverage policy that'll keep you and your family safe on the road. Work with your insurer to see what makes the most sense — that's what they're there for, after all.

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