The amount of insurance products available for your vehicle can be overwhelming.    Each dealership will have an opinion on which product is the “must have” insurance.   Be cautious: as at times the “must have” product is really the one that pays the dealership the most income.    This article will attempt to dissect the main “add-on” products that are available for your vehicle.   To determine which one is right for you, you will need to become informed on what is covered in the limited warranty and if you decide to purchase it, the extended warranty.    Duplicating warranty coverage is equivalent to flushing money down your toilet.

Tire and Wheel Insurance:  This is one of the fastest growing insurance trends in the automotive industry.  The majority of auto insurance companies will not pay to replace a tire that has been damaged due to road hazards.  This is where tire and wheel insurance or what is also called road hazard insurance comes in. Tire and wheel insurance will cover the repair or for a replacement of a tire that is damaged due to road hazards.   The details of what is considered a road hazard will vary from company to company.  Read the policy carefully and find on what conditions need to be in place in order for a tire to be replaced.

Here are the facts:

• The cost of tires can range anywhere from $150-$700 depending on the make and model of your vehicle.
• High performance cars typically use low profile tires to accommodate for larger tires. This places additional stress on the tires putting them at an increased risk for damage.
• The insurance will not necessarily be transferred to replacement tires
• You may have to replace your tires due to wear and tear before a problem occurs
• Some companies will not replace or repair a tire if it’s been damaged below a certain tread depth
• There may be a limit on the cost of the tire replaced which may not cover the cost of your vehicle’s tires
• If you purchased extended warranty, it may already include road hazard insurance policy

Road Side Assistance:

This product is exactly what it sounds like: it will assist the driver out of unexpected circumstances that occur on the road. This product usually covers towing, out of gas service, replacing your flat tires, unlocking your vehicle, and accident/collision assistance.  However some road assistance companies will also assist you before you get on the road. This unique trip planning feature may provide you with maps, and ideas for restaurants and hotel accommodations saving you both time and money.

When looking at purchasing this product find out:

1)      The area where services are covered: most are at least national if not all of North America.  However, smaller companies will have a limited range of coverage

2)      Is this already covered in your warranty? There is no point in duplicating the product.

3)      Does it cover all drivers of the vehicle? Or only the primary driver?

4)      What is the length of term for coverage? If the term expires during the duration of your lease how can you renew it?

Windshield Replacement Insurance:

The majority of auto insurance companies will cover the cost of replacing your windshield.  However, some customers do not like making a claim for something so minimal.  This type of insurance will cover the repairs and damages that could occur to windshield.

LoJack/Boomerang:

Lojack/Boomerang is a vehicle recovery system working with radio frequencies.  As far as theft protection goes, this product has a high success rate in recovering the vehicle after theft has occurred.   Once you purchase the system a small radio frequency transceiver is placed in your vehicle.   Each receiver is linked to the particular VIN of the vehicle.  In the case where your vehicle is stolen, the police would input the Lojack code linked to your vehicle activating the inaudible single.  Police vehicles that are equipped with the Lojack system would listen to the signal to locate and ultimately recover your vehicle.

Approximate cost: $695.00 plus installation

Benefits:

1)      Discounts available through some auto insurance companies this will vary according to State regulation.

2)      Limited warranty for 2 years, if vehicle cannot be located within 24 hours, the cost of Lojack will be reimbursed

3)      Recovery rate of 90% over the past 15 years

4)      Difficult for thieves to locate the receiver  and no signs that receiver has been installed on the vehicle (i.e. external antennae)

Disadvantages:

1)      Cost prohibitive in areas where car theft may be a minimal issue

2)      Vehicle specific: cannot be transferred to your new lease

3)      Lojack will not be activated until the vehicle is reported as stolen

Excess Wear and Tear Insurance:

In a leased vehicle, you are liable to pay for any damage that is evaluated as excess wear and tear.  Insurance companies will cover any major damage that occurs due to an accident.  However, they will not cover the typical dents and nicks that may occur on your daily drive.  Excess wear and tear insurance is available to pay for those damages at the end of your lease.

The typical company will cover:

• Scratched and chipped paint.
• Stains and spotting of upholstery and carpet.
• Tires.
• Dings and minor dents.
• Chipped glass.
• Wheels and wheel covers.
• Lenses of headlamps, rear lamps, and fog lights; tail and turn signals and brake light lenses; sealed beams, halogens and incandescent light bulbs.

Advantages:

1)      Peace of mind at the end of your lease

Disadvantage:

1)      Cost of product may be more than cost of repairs

2)      Not all damages will be covered: for example it will not cover missing or mismatched parts.

Maintenance:

This package will typically include a slightly reduced price for a series of maintenance services completed at the dealership.   Commonly these packages will include a set of service treatments that will carry you through a portion of your lease contract.

Advantages:

1)      Typically factory approved: ensures that you complete the maintenance as it has been prepaid

2)      Slight cost savings if you were intending  on completing your service at the dealership

Disadvantage:

1)      Reduced options on where service can be completed.

2)      Will not necessarily include all maintenance issues that may arrive.

Add on products are an attractive alternative to extended warranty.  The product is typically less expensive and targets a specific coverage.  The intention of add on products is to enhance your leasing experience.  Ensure that the product that you choose to purchase is beneficial to you.

Whether it’s Future Shop, Sears or your local appliance store: everywhere is offering extended warranties.   When purchasing a warranty for a washer, dryer or a new computer it is a fairly easy decision.   Is $50-$200 extra worth the peace of mind for another year?  For the majority of buyers, it’s a quick response:  usually based on the cost of the warranty.   Sadly, this is also how quickly a decision is made for extended warranty on a vehicle.  When the cost of a warranty can range anywhere from $700-$3000, the buyer often quickly responds no.    Don’t be this buyer!   Extended warranty is not for everyone.     However, having the additional coverage provides peace of mind and makes financial sense for a lot of consumers.

The Standard Warranty

The first step is to understand what is covered under the vehicle’s standard warranty: which will vary from manufacturer to manufacturer.   On average, most will cover any potential defect in the way that the vehicle functions.  Often times, these repairs are completed prior to a problem occurring in your specific vehicle.   These recalls are repaired as quickly as possible.

The times where your warranty may come into question, is when a unique problem occurs to your vehicle.  In these conditions, the service department in your dealership will thoroughly investigate the vehicle and make a request to the manufacturer for warranty coverage.   Depending on the circumstance, warranty may or may not be approved.    Protect yourself by becoming informed on the conditions that your vehicle needs to meet in order for the warranty to remain valid.

Did you know?

• The warranty in a cd player may become null and void if the manufacturer discovers that copied discs were played in the machine.
• Maintenance needs to be maintained at a factory authorized service centre in order for the warranty to be valid.
• Repairs may not be covered if a modification has been done on the vehicle: for example installing an after- market part.

The manufacturer’s website will usually detail the warranty coverage that they have for their vehicles.   However do not use this as your only reference for understanding the company’s warranty.   A website is used by the consumer to obtain information but the manufacturer will use it as a marketing and advertizing tool.  Each website will highlight the benefits of their warranty over other manufacturer’s warranty.   Be cautious, although the warranty may sound great on the website you do not know the fine points of what is covered.

For example: The Volkswagen website indicates the following information for their warranty coverage:

1)      Basic Limited Warranty: This warranty will apply for 4 years or 50,000 miles whichever comes first.    However, the warranty is limited and wear and tear items and adjustments are excluded after the initial 12 months, or 12000 miles.

2)      Power Train Limited Warranty: 5 years/60000 miles.

3)      Corrosion Perforation: 12 year, unlimited distance Limited Warranty against Corrosion Perforation.

The website only gives a bird’s eye view of what is covered in the warranty.  Here are some questions that are left unanswered:

1)      What does basic limited warranty mean to Volkswagen?

2)      What is considered a wear and tear item?

3)      What does the warranty define as power train? Does it cover the whole transmission or only certain parts? Are both parts and labour included?

4)      Does the warranty cover the entire repair procedure including: Labour for inspection, dissembling the parts, Analysis, repair and re-installation.

5)      12 year seems an excellent time period for corrosion perforation.  However, what do they mean by the words “limited” warranty?

In order to fully understand the warranty, you need to read it.   Reading the warranty is critical before making the decision on whether you need an extended warranty.

Some factors that come into play for an extended warranty:

1)      Does the term of the limited warranty cover the term of your contract? If not, you may want to opt for an extended warranty to cover that additional time period.

2)      Some extended warranties have bonuses such as coupons to complete maintenance and services.  If this is the case, find out the exact value for the services that are included.

3)      The extended warranty may have an extended area of where they permit both your service and repairs to be completed.

4)      The extended warranty may include Road Side Assistance and a rental car while your vehicle is being repaired. This will save you time and money.

5)      The extended warranty may cover items that are seen as normal wear and tear.

Basically extended warranty will only make sense if the warranty covers any potential gaps and risks that your standard warranty leaves open.  You do not need an extended warranty that covers the exact items and terms that your standard warranty does.

Before you decide to purchase that extended warranty there are a few more things you need to know.  First of all, there are several companies that offer extended warranty: review the terms and conditions as carefully as you would review any contract.

Research the company:

Is the company well established? Find out how long the company has been in existence, if they are only on the web and how many plans that they have sold.   You also want to research the procedure for making a claim.  When is the claim resolved? What are the hours of operation? Is there a limit to the amount of claims that you can place? How can you contact the company if you have a question or concern?   What is the cancellation policy for the warranty and finally can the warranty be transferred?

The Better Business Bureau or Web Assured should be able to provide you with information on the company that you are researching.  If you are unable to find any information on the company, or can only find reviews on the company’s website, be wary.

Don’t be persuaded by a low price:

When looking at extended warranty do not go for the lowest priced product on the market.    Often the lower priced companies are not insured and pay their claims from the income that they generate from other consumers.  Learn about how the company pays for their claims.   A company that is self-funded is much more likely to go bankrupt than a company that is fully insured.

Purchasing extended warranty should be an individual decision. Take your time to read both your standard warranty and extended warranty contract before making the final decision.  An extended warranty should provide you peace of mind and make financial sense.   However there are some situations: a short term lease agreement or by purchasing a warranty from a self financed company, where you will simply be wasting your money.

Credit Insurance is a protect for the unexpected negative events in life: such as death, disability and job loss.  Purchasing this insurance will help protect your credit rating and provide an additional peace of mind to the consumer who may be concerned about unpredictable events.    The dealership will often discuss these optional insurances with you when you are finalizing your lease agreement.

This article will detail the main types of insurance available and provide the advantages and disadvantages to each insurance type.

Credit Life Insurance

Coverage: This insurance coverage will pay the remaining required payments or the early termination penalties (whichever the leasing company requires), should you die before the term of the lease has ended.

Limitations: Approval for life insurance is based on your health at the time that you sign the lease agreement.  Depending on the insurance company, they may not extend life insurance if you have a previous health condition or it may be declined due to your age.

Advantages: Peace of mind that should anything happen that may result in your death;  your estate or heirs will not be responsible for paying for the vehicle.

Disadvantages: Read the fine print.  Some insurance companies do not cover death due to pre-existing illnesses or the policy may be cancelled at a certain age.

If you are of good health, the costs of the life insurance may outweigh the risks of death. In addition, if you have life insurance elsewhere it may already cover any outstanding vehicle payments.

Credit Disability Insurance

Coverage: Should you become disabled and unable to work due to an accident or illness your lease payments will be covered until you are able to return to work.

Limitations:

1)      Exclusions for previously existing illnesses and/or disabilities.

2)      The term of the contract will specify how long you need to be off work before you can claim the insurance.  You may have to continue to make your payments until this time period has expired.

3)      Most insurance companies will require that you have been employed in a fulltime position immediately prior to the disability occurring.

Advantages:

1)      Peace of mind in the event that an unexpected illness or accident occurs.

2)      Your credit rating will be protected as your payments will continue to be made.

3)      Protects your vehicle from repossession as your payments are being made on your behalf

Disadvantages:

1)      Delay in the coverage beginning, which may result in late payments and increased stress at the onset of your illness or disability.

2)      The conditions of the disability insurance may change after a certain period of time. For example some insurance companies state full coverage up to 12 months should you not be able to work at your occupation at the time of disability occurring.   However, after 12 months have passed the coverage will only apply should you not be able to work at any position that may fit your education, training and experience.

3)         You will need to be employed at a full time position prior to the injury or illness occurring.

Involuntary Loss of Income Insurance:

Coverage: This insurance will cover your monthly lease payment in a situation where a layoff has occurred resulting in a loss of income.

Limitations: This insurance will only take effect should your termination be involuntary.  Resignation will not be a justified reason for this policy to come into effect.  In addition, the insurance company will usually require that you were employed full time prior to the layoff.

Advantages:

1)      Credit rating is protected as your payments will be made

2)      Peace of mind during a stressful period of time

3)      Protects your vehicle from repossession as your payments are being made on your behalf.

Disadvantages:

1)      It may be difficult to provide the required documentation to support that a layoff occurred

2)      Limited time period that insurance is covered which may not provide you with enough time to locate a new position.

Summary:

Prior to purchasing credit insurance, you need to consider your personal needs.  Each additional policy that you add to your contract will cost money.   Spend this money wisely.

Some questions to ask:

1)      What is the cost of the premium?

2)      In which conditions is the coverage excluded?

3)      In the event that I was no longer able to work or was laid off, how long would I be able to make the lease payments?  Would that be enough time to either recover or find a new position?

4)      Do I have any other insurance (i.e. life insurance policy) that may already cover this vehicle payment in the event that injury or death should occur?

5)      If I could only choose one or two insurances, which one would be best for my current situation?

6)      If there is a consignor, what coverage does he/she have? Are we duplicating insurance coverage?

7)      In the event of making a claim, how long until the claim begins to take effect?

8)      Can I afford the higher lease payment?

9)      Are you currently employed in a full time position? If not, does the insurance cover your particular situation (whether you are retired, self-employed or working part time

Taking the time to know the product that you may be purchasing will help ensure that you make the right choice. There are some excellent insurance products available however they are only beneficial if they work for your current financial and lifestyle situation.   Make sure that you purchase the right product for you.

Auto Insurance is very important when you own and operate a vehicle. In fact, in many states it’s a law that you have to have auto insurance, at least liability so you’re covered in the case of an accident. If you’re looking for auto insurance and you’re doing it for the very first time, you may find it very confusing and difficult to find the right insurance company. It’s important to find an auto insurance company that you can trust and one that will be willing to explain whatever you don’t understand about your auto insurance coverage.

There are many different auto insurance companies and many of them have been around for many years, whether they have good or bad reputations with the public. To further help you, I’ll be listing some of the major auto insurance companies as well as how they rate with their customers in terms of price, coverage and customer service. Although all the insurance companies had a couple negative reviews (you’ll never find 100% satisfaction all the time), the majority of the reviews were extremely positive in all categories. The ratings are with the highest rated auto insurance listed first.

USAA Banking and Insurance started in 1922 as an insurance company for servicemen and as revolved into a company that serves more than five million policy holders. They have received more positive ratings from companies like J.D. Powers & Associates and customers in every category including policy offerings, pricing, contacting the insurer and overall experience. When compared with some of the most well-known and largest auto insurance companies, USAA came out on top in all categories. They also offer their customers many creative discounts.

AMICA Insurance Company may be unknown in some areas but it’s not only well known to many but is rated right up there on top in customer service, claims and pricing. They keep in contact with their customers and are very “customer-friendly”. AMICA also offers other types of insurance besides auto.

Wawanesa Insurance Company is an insurance company located in California. They received the highest ratings from all their customers. They have excellent insurance rates for drivers with good driving records and are known for their superb customer service and low premiums. Their premiums are much lower than many larger insurance companies.  Their only negative was that their insurance is only offered in certain areas.

Farm Bureau Insurance customers feel that their agents do an excellent job of giving them the coverage they need. Their premiums are very low and they offer excellent rates for young drivers. Their offer very reasonable “no frills” insurance for your auto and also offer home and other insurance products. There were a few customer service issues but Farm Bureau was still rated as an excellent insurance company with very low rates and good coverage.

American Family Insurance Company is one of the more highly rated insurance companies due to their great coverage on auto, homeowners, renters and other insurance needs. Their customer service is known for being friendly, helpful and their premiums are very competitive.  American Family is referred to as a large insurance company with a “small town” personality. They also offer discounts if you have more than one policy with them. There were some that stated they had problems with fast claim service, but overall; they were still rated very high with auto insurance companies.

AAA-Auto Club is very well known in the financial services field along with their many satisfied customers. In addition to their excellent auto insurance, they are also known for their travel assistance, roadside assistance and other services. They offer personal service, excellent rates and great customer service. Many customers recommended also getting the $40 AAA Motor Club membership to enjoy even more savings on your auto premiums or any other insurance you have with AAA. The only complaint was that their roadside assistance was not very fast.

Erie Insurance Company may be one of the lesser known insurance companies but they are well known for their competitive pricing, great customer service and fast claims processing. In an emergency, Erie Insurance customers state they know they can rely on fast service. They only reason they are not well known is because of their lack of advertising, which is a large reason why their premiums are so low. Rated very highly in all categories.

Hartford Insurance Company (also known as the Hartford Group) is a very affordable insurance company with special rates for certain groups such as AARP members, etc. They were rated very high not just for their premiums but also for their helpful customer service as well as their affordable and convenient payment plans. They have offices all over the United States but still the main customer complaint was that they’re not well known so it’s hard to get a lot of location specific information on them. Compared to other insurance companies, the Hartford rated very highly.

State Farm Insurance Company tries to always live up to its motto: “Like a Good Neighbor, State Farm is there”. Customers of State Farm appreciate their good neighbor customer service in always being there when they’re needed in a crisis. They also offer life and fire insurance. According to many of their customers, prices weren’t the best but their great agents and fast response time more than makes up for it. They’re very worth the price.

Commerce Auto Insurance offers very good coverage on their auto insurance as well as home and commercial property insurance policies they offer. They’re known for their reliability, excellent customer service and claims. Although not the best in terms of premium prices, they were stated to be a very good all around auto insurance company.

Auto Owners Insurance Company has been around since 1912 and serves 25 different states. With over 5,900 insurance agencies and over 34,000 independent agents, you’d expect good coverage, which is what you get from Auto Owners. They’ve been given the highest ratings from Weiss Ratings Inc., A.M. Best, Ward Financial Group and a nation-wide consumer magazine for their claims satisfaction. They are specifically well-known for the many extra features they offer customers that other insurance companies don’t offer. They are known as a good multi-plan insurance company.

If you plan to lease a new car, one of the first things you need to look for is quality insurance. You need auto insurance that will properly cover you for the length of your auto lease and that will offer you competitive rates that you can afford without sacrificing coverage you need and want. If you frequently trade in lease vehicles for new ones, you want an auto insurance company that will make this process easier for you.

There are now many auto insurance companies out there; so many, in fact, that it can be difficult to know which one is best for you. But it’s not just about finding the best auto insurance company; it’s also about finding the one that meets your specific needs the best. Here we have reviewed five major auto insurance companies to give you an idea of the pros and cons and help you make a decision for your own automobile insurance needs.

Allstate

Allstate is a well known insurance provider that offers multiple types of insurance to its customers, including auto insurance. While the commercials say great things about the company, we wanted to investigate for ourselves and see if this really is a great company to choose.

What we found is an overall consensus that Allstate is great as long as you don’t have to file a claim but in the event that a claim is needed, it can sometimes be difficult to get the service you need in a timely fashion. Make sure if you use Allstate, you avoid this problem by getting a personal or local contact that you should speak to in the event that you need to file a claim on your insurance policy.

Allstate auto insurance is beneficial to those with good or better-than-average credit but those with lesser credit may see an increase in premiums and fewer deals and discounts. If you have good credit and a good driving record, Allstate might be the insurance company for you.

Here are some benefits to choosing Allstate as your auto insurance company:

• They offer benefits to people with good driving records
• You can receive a reduction in fees when you’ve been with them awhile and continue to maintain a good driving record
• Allstate is well known in the industry and has been around for many years
• Allstate has local representatives to help you when you do have to file a claim
• Offers many deals to help lower rates
• Will insure children living in the home with a driver’s license
• Lower rates to people with a good credit history

Even a great thing has its down points so here are some of the negatives to choosing Allstate as your auto insurance company:

• Calling customer service can sometimes be difficult if you do not have a personal representative to speak to because they are so large
• Some customers have reported it taking a long time to have a claim resolved
• Some people have had rate increases and other complications when moving across states
• May increase your rates periodically for poor credit history, even if you’ve never had a claim or missed a payment on the insurance account

Every case is different and each driver’s needs are different so you have to make the decision for yourself if Allstate auto insurance is right for you and your needs. Overall, they are a reliable and dependable company with good rates and a great reputation.

State Farm

State Farm is another popular auto insurance company. But are you really “in good hands” when you choose State Farm as your auto insurance agency? An insurance company doesn’t stay around for as long as State Farm has without doing something right but how can you be sure they are the right one for you?

Here are some benefits to choosing State Farm as your auto insurance company:

• They are large and well known
• Offer competitive pricing
• Have experience insuring leased vehicles and drivers
• Offer nice coverage packages
• Offer discounts in many situations

Here are some negatives about State Farm auto insurance:

• Rates may increase if your credit score drops
• Have been reports of not properly covering or finding “loopholes” to not have to cover a specific scenario
• Reports of trouble in accidents where both or all parties involved had State Farm insurance

Just like any other auto insurance agency, you will hear horror stories but overall, State Farm has been in business for as long as it has because it offers good, quality service.

AIG

AIG is another leading auto insurance agency but some people have reported problems with them honoring the policy when an accident occurs. AIG is another well known company that has it’s pros and cons. They are known for offering great rates, easy to get policies with most anyone approved. Some of the main complaints with AIG is that it sometimes takes a long time to get a response from them. This pertains to getting approval on a policy, asking a question, reporting a claim and basically any other contact needed with the company. We advise you to have a local and direct contact if using AIG insurance so it is easier to get in touch with someone when you need it. Other bonuses include a user-friendly website and good coverage for the pricing offered.

Farmer’s Insurance

Farmer’s Insurance is well known for their auto insurance policies and they have many types to choose from, including fault or no-fault (depending on state law), collision, comprehensive, deductible amounts, bodily injury, property damage, medical payments, personal injury protection, and uninsured/underinsured motorist coverage. If you’re looking for a company that will offer good rates at affordable prices with dependable service, Farmer’s Insurance might be a great choice for you.

One of the cons of Farmer’s Insurance is that they are not usually able to offer rates as low as some of the other guys but they claim to do so would require lowering the quality of service, something they are not willing to do. All in all, Farmer’s Insurance is a good solid choice of auto insurance company.

GEICO

Many people know GEICO, if for no other reason than for the lovable little gecko in the television commercials. GEICO has been a leading name in auto insurance for many years now and they also offer other types of insurance, too.

With GEICO you get:

• Some of the lowest rates in the industry
• Good coverage and policy options
• Discounts

Many people enjoy the personal care and attention they feel they receive from GEICO. This could be partly due to the fact that they usually have local representatives so you get someone close to home to handle your case.

Just like other major insurance companies, there have been some complaints of cases that were not covered or people who were not pleased with their customer service from GEICO but overall, people say good things about this company.

How to Choose the Best Auto Insurance Company

Now that you know some more information about some of the top auto insurance companies available, how do you know how to choose the best auto insurance company? If this is your first time choosing an auto insurance company, it can be more difficult to choose the right one for you. You may read reviews, take the advice of friends or family or base your decisions on premiums. When choosing the best auto insurance company for you, it’s important to weigh all the factors, not just take the opinion of someone else.

The most common problems that other people have with car insurance providers are:

• Refused claims
• Slow adjustment process
• Unsatisfactory payout on claims
• Feel forced to use insurer’s repair shop
• Poor repair quality
• High premiums
• Increased premium after accident
• Lack of personal attention or compassion
• Billing, policy, and other non-claim issues

Look into the rate of these problems and complaints of a particular auto insurance company when you are considering them for yourself. No company will be completely without complaints but you can look at the frequency of these types of complaints to help you make your decision. Be smart when shopping for your auto insurance and you have the best chance of getting the best rates and policy to fit your needs.