A Guide to Personal Accident Insurance
Personal accident insurance provides an extra added layer of financial security in the event you sustain a bodily injury or a killed as a result of an accident. When combined with other forms of insurance, such as life insurance, it can provide valuable protection for a family at an unexpected time when it needs it the most.
What is Personal Accident Insurance?
Personal accident insurance, also referred to as accidental death and dismemberment insurance, provides payouts to policy holders or their families who suffer losses due to unintentional injuries. It does not provide payouts for deaths due to natural causes or diseases.
Polices can be written many different ways or combined for comprehensive personal accident insurance coverage. Coverages may include:
Accidental Death. If you die from any kind of accident, your beneficiaries will be paid on your behalf. This policy is similar to life insurance, but it covers a much narrower spectrum of circumstances and often is less expensive than life insurance. You must die from an accident, and not from a disease, illness or natural causes. Often, people with active lifestyles will get both forms of insurance to make sure their loved ones are doubled up when it comes to financial protection.
Disability. If you are injured so severely that you can’t work anymore, then disability insurance will pay you a monthly income. Many people think that workers’ compensation or other forms of employer provided insurance will cover them, only to find out that they might be covered at a substantially reduced amount and for a limited amount of time of only up to 26 weeks. A personal accident insurance policy that provides disability payments will fill in financial shortfalls you may experience and will provide benefits for a much longer period of time. If you work in a dangerous occupation, this might be an exceptionally valuable type of policy to have.
Accidents. Many policies are written to pay you cash if you sustain an injury due to an accident. Cash can be used to cover the costs of treatment and for other expenses such as rent, groceries or utilities. Coverages will vary according to the type of accident you have. Some will cover just about any qualifying mishap even if the injury is minor. Other policies will only cover serious injuries. That’s why it is important to ask the right questions and make sure you understand all the details of coverage when you shop for a policy.
Even policies that provide coverage for all of these circumstances will vary by the amount of payout you could receive. A percentage of the face value of the policy may be paid depending on the severity of your injury as well. If you lose a limb or an eye, for example, you may receive a 50% payout as compensation versus if you die in an accident.
What Personal Accident Insurance Does Not Cover
Personal accident insurance pays out for several clearly defined scenarios, but it also does not pay out for several clearly defined scenarios as well. The most well-known instance of personal accident insurance not paying off if an injury or death takes place due to sickness or disease, but there are many others.
Keep in mind that every policy is a bit different and so exclusions may vary, but generally speaking, no benefits will be paid if any of the following circumstances exist:
- If the accident takes place in a country where a state of war exists whether it is declared or not, and the accident and resulting injuries were a direct consequence of the war.
- If you took drugs other than according to a manufacturer’s instructions or your doctor’s prescribed instructions.
- If you take drugs for the treatment of a drug addiction.
- If you cause an accident while driving a vehicle and your blood alcohol level is above the legal limit in the state or in the country where the accident takes place.
- If your injuries are intentionally self-inflicted.
- If injuries or death takes place while committing suicide or attempting to commit suicide.
- If you sustain an injury or are killed while directly involved in an unlawful act.
- If you deliberately or recklessly expose yourself to danger.
- If you are injured or killed while you are flying, unless you are a fare-paying passenger on a commercial aircraft.
- If you are injured or killed while you are practicing, training or participating in a sport as a professional or semi-professional athlete.
How Does Personal Accident Insurance Work?
Most personal accident insurance policies pay out a lump sum benefit when a policy holder dies or suffers a bodily injury as a result of an accident or unforeseen event. Standard polices are normally written to include payouts in the event of accidental death, permanent total disablement due to an accident, the loss of a specified body part, or the loss of the use of a specified body part. Some policies also cover permanent partial disablement, or temporary total or partial disablement as well.
The policy does not pay out if the death is caused by sickness, disease or any naturally occurring condition or process. In other words, if you get hit by a car, you will be paid. If you die of cancer, you will not be paid.
The amount of the benefit, the areas of coverage and exclusions all vary from policy to policy. That’s why it is important to pay close attention to the details when you are shopping for a policy. Do not assume that a specific type of accident is covered and for a certain amount. You owe it to yourself and your family to ask these important questions up front.
In addition to being able to purchase personal accident insurance as an individual consumer, many times an employer will offer it as a benefit, getting more favorable rates because it is part of a group policy. At other times, personal accident insurance may be bundled with other types of insurance, such as life insurance or with travel insurance.
Before determining whether or not to pay out a claim, an insurer will look at the sequence of events of a death or injury to make sure the provisions of the policy have been met. Sometimes this is a straightforward process. At other times, it is not. There are also exclusions in a policy and if they are present, then a claim probably will not be paid. Exclusions can include things such as if the policyholder was using drugs or alcohol, and what role they played in the accident.
Reckless exposure to danger is another exclusion and may include things such as driving with excessive speed in a car or taking on the hobby of parachuting or base jumping. You should check with your potential insurer before taking out a policy to get a clear definition of what constitutes reckless exposure.
Another common exclusion is suicide.
Sometimes it is clear that a suicide was a cause of death. At other times, it may be less so. In those instances, an insurer will look to a coroner for a verdict. Coroners must be satisfied beyond a reasonable doubt that a person committed suicide before recording a death that way. When it is recorded that way, the death is not accidental, and a benefit will not be paid.
Policies may pay as much as $250,000 for some kinds of accidental deaths. When an injury is involved, the amount of benefit you can receive will vary depending on the injury and the associated costs. Those associated costs can include things such as a trip to the emergency room, ambulance transportation, surgery, hospital stays and other related out-of-pocket expenses.
When an accident results in a permanent disability, you will be paid a percentage of the policy amount. For example, if you lose a limb or the loss of sight in one eye, you may receive a lump sum payment of 50% of a policy value. If you become a paraplegic, you may be entitled to 75% of the policy amount.
When your policy is in force, unless certain exclusions are in play, you are covered 24/7. With a few exceptions, coverage is generally worldwide.
Policy costs will vary based on several factors but expect to pay about $25-$35 per month for family depending on the level of benefits, the type of benefits you choose and the carrier who writes the policy.
What is the Difference Between Personal Accident Insurance and Life Insurance?
Personal accident insurance and life insurance can work hand in hand to provide complementary coverage for you and your family in a variety of situations much greater than either one can provide on its own.
It’s true that life insurance offers broader coverage than accidental death insurance if you pass away, but you should still consider obtaining a personal accident insurance policy for a number of reasons.
Life insurance pays benefits when death occurs due to natural causes and in deaths caused by unintentional injuries, such as in a car accident. In a 2013 CDC study, statistically speaking, accidental deaths were ranked as the fourth leading cause of deaths in the United States (just behind heart attacks, cancer and chronic respiratory disease), meaning that your family could be financially vulnerable if a sudden accidental death takes place. While a life insurance policy will pay benefits, a personal accident insurance policy is an affordable way to provide additional financial peace of mind at a time in your life when your expenses may be the greatest and your loss would be financially devastating more than at other times.
Many people have active periods or higher risk periods in their lives and use term insurance to protect against death for a defined period of time. Personal accident insurance is also used as an added layer of protection in these instances.
Another thing to consider is that if you’re leading an active lifestyle, you could be more susceptible to accidents if you engage in any kind of risky activities. These activities may not even seem obvious, such as if you like to ride bicycles or perhaps surf or snow ski on a regular basis. Many people are killed in accidents each year while participating in these activities, often through no fault of their own.
Personal accident insurance also means that even if you aren’t killed in an accident, you may also receive a financial payout for permanent injuries you may receive even if you’re engaged in some types of active or risky lifestyle choices. Obviously, you must pass away to have your family receive life insurance benefits.
In other cases, you may have an existing medical condition that makes it challenging to buy life insurance. While personal accident insurance will not give you the same kind of coverage as life insurance, it will still give you partial coverage is you are injured or killed in an accident.
What Does Personal Accident Insurance Cover?
Because every policy is different, there is no standard answer for this. Depending on the policy and coverage that you choose, personal accident insurance may cover:
Accidental death. A death must be ruled accidental and must not be attributed to natural causes. Also, every policy has certain exclusions (i.e. suicide, death due to reckless behavior, etc.) that will not be covered. It’s vital you understand all circumstances that the policy will pay out before buying it.
Permanent total disablement. Benefits are paid when physical injuries lead to total disability of the policyholder. In most cases, the entire policy sum is paid.
Permanent partial disablement. When an accident leads to partial incapacity, payment may be up to 100% of the policy amount, or depending on the nature of the disablement, the policy may pay out a percentage.
Temporary total disablement. If an accident injury results in total disablement for a limited amount of time, then a policy will normally pay a weekly amount, up to the policy limits, until the person is able to return to their work.
Out-of-pocket expenses. Personal accident insurance will also pay for out-of-pocket expenses for lesser injuries that will still leave you with medical costs and living expenses that must be addressed. Some of those expenses may include:
- Doctor visits
- Hospital stays
- Lost wages
- Rent or mortgage payments
- Car payments
- Child care
Once you make your claim, payment usually takes place within a matter of days so that you can rest easy in knowing your short-term financial impacts are covered.
A claim could be denied if you have pre-existing medical conditions or injuries or if you failed to disclose any conditions or an occupation that is specifically not covered by a policy. Also, if you sustain a workplace injury, you may not receive payment if your workplace provides you with compensation to cover you for your injury.
In addition to pairing up a personal accident insurance policy with life insurance, it is often used in conjunction or instead of other types of insurance as a form of income protection as well.
Depending on the level of coverage for a health insurance policy, it can be used to cover deductible amounts that don’t kick in on a health policy. It fills in what could otherwise be considerable gaps if a person seeks treatment under a health policy with a high annual deductible. It can also be used as a complementary source of income if a person has long-term disability insurance. Disability insurance typically only pays a percentage of a person’s income, and personal accident insurance can help bring income to closer to 100% after an accident.
At other times, to save money on expensive car insurance, people may not have collision coverage on their vehicles. Personal accident insurance can be used as a protective measure in this instance as well.
Why Buy Personal Accident Insurance?
There are many reasons why you should consider buying personal accident insurance:
- Family security. If you are vital to the financial security of your family, then you must do everything you can to protect them. This alone can be a powerful enough motivator to spur you to buy a policy.
- Family coverage. It is easy to also take out policies on any member of your family.
- Low cost. Depending on where you live, your age and how much coverage you want, you may be able to get a policy for as little as $20 a month.
- Lower premium. Although payout terms are restricted, the cost of a personal accident insurance policy is much less than what you would pay in premiums for life insurance policy.
- Worldwide coverage. Although there are a few exclusions (e.g. you aren’t covered in a country where war is taking place), you are otherwise covered throughout the world.
- Easy claim method. Submitting a personal injury accident claim is generally a streamlined and easy process.
- No demand for medical tests and documentation. Depending on your policy, it can be a relatively easy process to activate the policy without burdensome tests and documentation. For standalone coverage, this can be an attractive benefit if you have been turned down for life insurance.
- Additional coverage above normal health insurance coverage. This can include costs for rehabilitation and other expenses not normally coverage by your existing health care policy.
- Premiums are tax deductible. You can claim a tax deduction if you pay the total cost of the premium out of pocket.
- Flexibility on how the benefit is paid. You can choose to receive a payment in a lump sum or have the benefit paid on an ongoing basis to help with monthly living expenses.
- Flexibility on how benefit payments are used. You can use benefits to pay for a variety of incidental expenses related to your injury or for living expenses.
How Much Does Personal Accident Insurance Cost?
Naturally, there are several variables that will determine the actual cost of a policy, but you can find coverage for about $20 or less per month for an individual and $35 to $40 per month for a family, depending on the policy benefits, amounts, and the carrier you choose.
Some of the factors that affect the cost of personal accident insurance include:
Age. The older you are, the most likely you are to have an accident, so expect that your premium will be higher. Also, insurers generally only provide coverage for people up to 70 years old.
Occupation. If you’re a professional skydiver or heavy crane operator, expect to pay more than if you’re any kind of an office worker.
Benefit amount. The higher the benefit amount, the higher the premium.
Coverage options. The more comprehensive policy that you choose, the higher the premium will be.
Who Needs Personal Accident Insurance?
Some people will derive more potential benefits from having personal accident insurance than others. It can prove to be an effective policy for people such as:
- Motorcyclists, from casual weekend riders to daily drivers using a motorcycle as a primary form of transportation;
- Bicyclists, especially those who ride in groups for extended periods and geographic lengths;
- Horse riders or those who regularly engage with large and potentially dangerous animals;
- Senior citizens and the elderly who are more prone to accidents as shown by statistics;
- Children and students who are especially active during their formative years through college;
- Self-employed who may need additional coverage that health insurance may not provide or who engage in highly active occupations;
- Members of sports clubs;
- Tradesmen who work with dangerous equipment such as saws, drills, presses, and other power tools, and
- Families who want an extra layer of financial protection in addition to other forms of insurance.
Is Personal Accident Insurance Necessary?
Not always, but there are many instances where it makes good sense to invest in a policy.
For example, if you’re engaged in a dangerous occupation or you can’t afford the premiums for a life insurance policy, then a personal accident insurance policy may be necessary to provide you and your family with added security and peace of mind. If that is an important goal for you and your family, then personal accident insurance is a wise and reasonable investment.
Is Personal Accident Insurance Worth it?
The short answer is, it depends.
Under several circumstances, personal accident insurance is worth it. According to the National Safety Council, close to 40 million Americans get medical attention for injuries each year. In addition, the NSC also provides details on the odds of dying due to various activities, many of which could be classified as accidents ranging from motor vehicle crashes to firearm discharges or electrocution.
Personal accident insurance may also make sense for you or your family if:
- You work in a dangerous occupation.
- You drive long distances for your job.
- You have an active lifestyle with family members who play a lot of sports.
- You engage in hazardous hobbies such as hang gliding, rock climbing, scuba diving, or riding dirt bikes.
- You want added protection to offset the high out-of-pocket expenses that may be associated with your healthcare plan. With personal accident insurance in place, you may be able to lower your health insurance premium by raising the deductible because of the added coverage you enjoy at a less expensive cost.
- You have a low tolerance for financial risk and exposure when it comes to medical expenses.
- You do not have a life insurance policy or cannot afford to get one.
How Much Personal Accident Insurance do I Need?
Part of determining how much personal accident insurance you need is driven by what you can afford. If you are financially able, insurance experts recommend buying the same amount of personal accident insurance as life insurance coverage that you have. Ideally, this means if you have a $100,000 life insurance policy, you should also have a $100,000 personal accident insurance policy as well.
Many people can’t afford to buy enough life insurance coverage, or they underestimate the financial hardships they might encounter if a loved one dies. In those instances, because personal accident insurance costs less, it might be wise to buy more accident insurance as a safeguard that fits within your budget.
How much personal accident insurance you should buy can also be influenced by your occupation. The more dangerous your occupation, the more you should consider a personal accident insurance policy. It may make sense for people who are heavy equipment operators, commercial fishermen, construction workers and other similar employment where serious injuries are higher than normal.
How Do I Choose Which Personal Accident Insurance to Buy?
Like any other major purchase, you need to do research, shop and compare before deciding which personal accident insurance to buy.
Some things to consider include:
Policy terms and conditions
- Policy limits
- Financial stability of the provider
- Customer service reviews and reputation
- Payment turnaround time
- Ease of submitting a claim
- Payouts for out-of-pocket expenses
- How does a policy work in concert with my life insurance?
- Details of family coverage
- Is my age a factor?
- How does this particular policy fit into my overall financial strategy?
Which Personal Accident Insurance is Best?
There is no one set policy that is the absolute best. It depends on your needs and circumstances.
First, determine the type of coverage you need and the amount that you want. Look for stable, well-known companies that have strong financial metrics which can be determined by looking at ratings agencies such as A.M. Best. It is the oldest and most widely recognized provider of insurance company and industry data and news. You can also check out the Better Business Bureau, a reliable provider of unbiased information on insurance companies based on consumer input.
In some cases, an employer will offer personal accident insurance through a group policy. In this case, the work has been done for you and you can either decide to opt in at a reduced premium or go your own way by working with an independent agent.
Another possibility for comparing and purchasing accident insurance policies from various insurance companies is Emerge. This website helps you make decisions about personal accident insurance based on your lifestyle and budget.
When you’re involved in a car accident, there are a lot of things to sort out. You might have to deal with the police, doctors, attorneys, and of course, insurance companies.
Once you get past the immediate shock of an accident and take care of the pressing needs required to get your life back on track, one of the things you’ll probably want to know is how long an accident will impact your life.
Assuming you recover fully from any injuries, that your car has been repaired, and other parties in the accident have been provided for, one of the few remaining questions will be how long an accident will stay on your driving record because it could have a direct impact on your wallet or pocketbook. If you’re at fault, and sometimes even when you are not, an accident can cost you hundreds or thousands of dollars in increased insurance premiums for as long as an accident appears on your driving record.
Unfortunately, there is no simple or single answer to this question; much of the answer will depend on the severity of the accident, if you were at fault, and where you live. The good news is there are some things you can do to counteract a premium increase due to an accident as well, so you may not be completely stuck if you’re involved in a collision.
Knowing how long an accident will stay on your record is important, but you should also be aware that there are several factors that go into determining the car insurance rate you’ll pay:
- Vital statistics. Your age, gender and number of years of driving experience.
- Where you live. Statistically, drivers in some places are just at more of a risk for accidents than in other places.
- Credit score. Some insurance companies use this as an indication of how much risk you might be while driving. Be aware that this factor is not allowable in all states.
- How often and how far you drive. More miles and time spent on the road translates into a greater risk for accidents.
- Driving habits. Insurance companies also look at how and when you drive.
- Occupation. Some occupations are considered to be more at risk or safer by some companies. This is also not an acceptable factor in some states.
- Accident record. More accident claims translate into a higher risk for auto insurers.
Because insurance is regulated at a state level, where you live will have a major impact on how long an accident will remain on your driving record. Every state is different, and not just in the amount of time, but taking into consideration the circumstances of an accident as well.
Here’s a sampling of how long an accident will stay on your record in certain selected states:
- California – Most offenses stay on a driving record for either three years or 10 years. Car accidents stay on a record for three years from the date of the accident. DUI convictions stay on a record for 10 years.
- Colorado – Complete driving records are available for a period of seven years, including citations, accidents, violations and fines.
- Florida – Traffic violations remain on a driving record for three to five years and severe violations will remain even longer. Alcohol-related violations stay on a record for 75 years.
- Georgia – If no ticket is issued, it will not appear on your record. Otherwise, most violations and accidents stay on your record for seven years.
- Texas – Accidents and tickets stay on the state’s motor vehicle agency records for three years. DUI infractions stay on a driving record forever.
- Michigan – Any tickets due to moving violations stay on state records for two years from the conviction date. Accident convictions stay on the state records for at least seven years from the conviction date. DUI convictions are permanent, as are convictions for a fatality.
- New York – An accident stays on the state motor vehicle record during the year it took place and for the following three years. It is removed on January 1 of the fourth year after the accident.
If you’re trying to determine how long an accident will stay on your driving record, check with your insurance company or with your state’s motor vehicle department.
How Much Will Your Car Insurance Increase After an Accident?
The answer could be zero. The answer could be a lot. But for the most part, the answer is somewhere in between because there are so many variables that go into a rate increase decision.
On the low end, if an insurance company has an program in place that forgives accidents, then your first accident could result in a zero increase in premiums. But you’ll have to meet certain requirements for this to happen.
You shouldn’t see a premium increase if you’re not responsible for the accident either. One stumbling block is if you live in a state where no-fault insurance is in place. If that’s the case, then both parties in an accident will end up paying for some of the losses incurred in an accident. And when an insurance company has to pay out on your policy, you can expect that you’ll see some amount of an increase. However, some states prohibit insurance companies from raising your premiums after accidents that weren’t your fault.
The other scenario where you might not see a bump is when an accident is minor and there’s very little damage. Even if you’re the one who is at fault, if it’s only a scratch or two, then you might avoid a premium increase. This will vary from state to state. A premium increase after an accident will usually last anywhere from three to five years but will also vary by company and state.
You can expect a percentage bump up when an accident is more serious, when you are primarily at fault and/or when you receive a ticket as part of the accident. How much of a bump will depend on the particulars of your case, but a 25 to 50 percent increase or more might be in your future.
A 2016 study by InsuranceQuotes revealed the five states that reported the largest premium increases after a single auto claim worth $2,000 or more were California (63.1%), New Hampshire (60.3%), Texas (59.9%), Massachusetts (57.3%), and North Carolina (57.3%).
Conversely, states with the lowest premium increases after a similar claim included Maryland (21.5 percent), Michigan (26.1 percent), Oklahoma (27.9 percent), Montana (30.2 percent), and Kentucky (30.6 percent).
Not surprisingly, rates tend to jump the most when a driver causes an accident where a bodily injury is involved. The least significant jump in rates were those accidents involving comprehensive claims.
How Long Does an Accident Affect Your Car Insurance Rate?
There is no single or simple answer to this question. Insurance companies take into account where you live, if you were at fault, whether or not you got a ticket, and how serious the violation was in deciding the length of time your rates may be affected. Who you are insured by will also be a consideration as well.
Minor accidents and violations can stay on your record for three to five years on your state’s motor vehicle agency. However, if you have a more serious conviction, such as a DUI where an accident took place, this can stay on a driving record for 10 years even if you were not at fault in places such as California. But in Florida, terms are much more onerous, with alcohol-related accidents staying on a person’s driving record for 75 years!
Some states limit how far back an insurance company can consider at-fault accidents when determining a driver’s insurance premium. For example, Massachusetts limits the look-back period to no more than five years. And if you were not at-fault in an accident, then it may not count against your record and impact your insurance premiums, but this is not always the case. In other instances, state laws prohibit insurance companies from raising your rates after an accident if it was not your fault.
In jurisdictions where premium increases are allowed after an accident, assuming there are no aggravating factors, increases will last three to five years. The surcharge due to an accident may also decrease as each year goes by, assuming you do not get into any more accidents.
How Much Does an Accident Affect Your Car Insurance?
Aside from the physical and emotional trauma that often occurs with people in car accidents, there is also an overarching financial concern as well. Many people worry that if they are in a car accident that their insurance rates will go up for many years. In fact, many people hesitate even filing a claim at all because they attempt to weigh the financial pros and cons after an accident.
There is no “one size fits all” response to this very real concern. Several factors come into play when determining if and how much an accident will affect your car insurance.
- Who was at fault? If you were not at fault, then there’s a chance your premium will stay the same. But if you were responsible for the accident, you’re more likely to experience a rate hike. Things get a bit more complicated if you live in a no-fault state which means that both insurance companies will pay for some of the costs of the accident. Like it or not, in a no-fault state, there’s a good chance your rates will rise no matter who caused the accident.
Premium bumps can vary widely, too. For example, according to a 2015 industry study, Massachusetts drivers saw a nasty premium spike of 76% after just one claim. Conversely, Maryland drivers saw an average increase of only 22% under the same circumstances. Overall, the same study found that drivers who make a single claim of $2,000 or more could expect an average premium increase of 41%.
- How severe was the accident? It’s one thing to get a scratch on your paint, a bang on your bumper or a pushed in quarter panel, but quite another set of circumstances if your car is totaled. The more damage, the more the insurance company will have to pay, and that could lead to a greater rate hike. Also consider that if someone is injured and you were currently getting a reduced rate because you have been a good driver, you could lose that benefit and a resulting 20-25% discount if you were at fault.
- What is my driving record? If you have a long history of no incidents (accidents and tickets), and you have been with a company for a long time, then you may be considered more valuable as a customer to an insurance company. This is because safe drivers are cheaper for car insurance companies to provide coverage for, and as a result, you may see less of a premium hike than someone who has a poor driving record.
- Does my insurance company offer accident forgiveness? Some companies reward good drivers with accident forgiveness, meaning that your first accident while covered under the company will result in no rate hikes. There is no auto insurance industry standard when it comes to defining what accident forgiveness is, so terms will vary from company to company and from state to state. For example, GEICO currently offers accident forgiveness to its customers, except in California, Connecticut and Massachusetts. This benefit is not offered on every policy, and terms and conditions are governed by state laws and regulations.
How Can You Reduce Your Car Insurance After an Accident?
There are strategies you can employ to try and keep your out-of-pocket car insurance expenses in line following an accident. Here are some things to consider:
- Increase your deductible. It’s true that you’ll trade a lower premium on the bet that you will be a safe driver who won’t get into an accident where you will end up paying more if you do. But consider that if you increase your deductible from $200 to $500, according to the Insurance Information Institute, you could reduce coverage costs by 15-30%. Bump the deductible and you could be looking at as much as a 40% reduction.
- Consider bundling your coverage. Some insurance companies are also in the business of providing other kinds of insurance. You can enjoy a nice discount if you buy renter’s or homeowner’s insurance from the same company who sells you your car insurance.
- Consider other possible discounts. If you drive an older car, now may be the time to think about dropping your collision or comprehensive coverage. Also make sure that the number of miles you drive is accurately reflected in your policy. The less miles you drive, the less risk you are for an insurance company, and rates are often based using the number of miles driven as a consideration.
- Report every accident to your insurer. Even if you are just in a fender bender, make sure to report it to your insurance company. How can this save you money? The simple answer is that it provides you with protection against legal actions by the other party that may not take place for months after the accident. If you don’t report the accident, you and not the insurance company could be on the hook for legal expenses, medical bills, vehicle damage and any other judgments in the plaintiff’s favor. It’s easy to see how this could quickly exceed any bump in policy costs you might experience.
- Shop for a new policy. This one may appear to be a bit obvious, but if you think you can find a better deal, or you don’t like how you’ve been treated due to excessive increases, then explore the marketplace to see what else is available. If you do, make sure you don’t base a final decision on strictly premium costs alone. Research companies online and through consumer publications. Also check with your state insurance department for customer satisfaction surveys and at A.M. Best to make sure an insurance company is financially stable.
Find the Cheapest Insurance Quotes in your Area
There is a sinking feeling that is unique to when your lock yourself out of car, it won’t turn over, or you run out of gas. Logic tells you that these are fixable problems, but there is still a nagging little voice in your head that usually triggers varying degrees of panic, frustration and concern over what it may cost you.
It’s the unexpected bumps in the road that will drive you crazy if you let them.
While you don’t have control over some parts of your life, when you and your car get stranded, you can minimize the impacts and the costs by having roadside assistance insurance in place.
We’ve compiled this guide to provide you a comprehensive resource to understand roadside assistance and how it works. You’ll find the following:
- What is roadside assistance?
- What does it cover?
- How does roadside assistance work?
- Where can I use it?
- Are there state restrictions?
- Who sells roadside assistance?
- Best companies for roadside assistance?
- How much does it cost?
Time to dive in to the details!
What is roadside assistance?
Roadside assistance insurance is a policy that protects you form the unexpected issues that can often arise when driving.
What does roadside assistance cover?
It covers you for a broad range of issues, whether your car suffers minor problems that can be fixed at the site of your problem or whether you need towing services to a nearby facility if something major occurs.
Minor problems may include running out of gas, replacing a flat tire, jump-starting a dead battery or unlocking your car when you have locked your keys inside. These can all be handled onsite and you should be on your way in short order.
For major problems, roadside assistance can be a life saver. Maybe you’re stranded due to a broken hose that left some important engine fluid puddled on the road, or a dead alternator, clogged carburetor, or some other kind of mechanical or electrical failure, you will need to avail yourself of the towing privileges that roadside assistance provides.
Depending on your coverage, your car will either be towed to a repair center up to a limited number of miles as provided by your policy, or you may have to pay extra to have your car towed to a provider outside of the coverage area.
At other times, your car may become stuck in mud, sand or snow and require an extrication or winching service to remove the vehicle and get you back on the road again.
Depending on what type of coverage you choose and where you purchase coverage from, you may be able to get no-cost or low-cost coverage. In other cases, you can purchase premium coverage, but it will be much more expensive.
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How does roadside assistance insurance work? How do I use it?
Before you actually need assistance, the first thing you should do after you buy a roadside assistance plan is to make sure you and every member in your family enter your policy’s emergency assistance number into your phone, or make sure to carry a copy of the number in your wallet. You will be under a bit of stress when an actual breakdown happens, and you will want to make it as easy as possible to find that all important number.
If and when you need to call roadside assistance, you may find yourself in the middle of a dangerous situation due to traffic or because you are not in a familiar area.
To minimize the danger, the first thing you should do if you notice the car is not acting right is to pull over to a safe spot, out of the flow of traffic. If it is after dark, try to make it to a well-lit area. Also, try to find a place where other people are present, such as a shopping center, restaurant, or a gas station.
If you can’t make it to the side of the road or are stuck in the middle of traffic, stay in your vehicle and turn on you emergency flashing lights. Traffic will pile up and you’ll likely hear more than a few honks, but you are much safer in the car than trying to cross the road.
As soon as your car becomes undriveable, you should call your roadside assistance toll free number to start a dispatch unit immediately. Many times, a dispatcher will be able to tell you the estimated time of arrival of your help. They will also take your phone number and give it to the dispatched unit who may use it to call you when they are close. If you’re in a dangerous location consider calling your nearest police department or 911.
The only time you should get out of your car is if you see smoke coming from under the hood. If you are handy with repair tools and want to try and fix a flat on your own, make sure you do not work on the side of the car that is exposed to traffic. Even if you know how, it is better to wait rather than put yourself in a high-danger situation.
As a way of alerting traffic, you might also consider popping your hood, which is the universal sign of a car in distress.
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Where can I use roadside assistance?
On the side of the road 😉 Just joking!
In most all cases you can use roadside assistance plans throughout the United States and Canada. However, you may not have coverage in Mexico or in other countries with a few exceptions. You should always check your roadside assistance policy before traveling anywhere.
Some roadside assistance policies have reciprocal agreements that provide coverage in other countries. If this is an issue for you, it is best to check with your roadside assistance provider to see if the plan you’re considering will reimburse you or provide service outside of where it normally operates.
Does roadside assistance only cover you in certain states?
In a few places in the United States, there are restricted roads where no roadside assistance vehicles may travel. In those instances, you will need to call 911 if you have a breakdown or need a tow, and hope for the best.
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How much does roadside assistance insurance cost?
Like every other service and product, it pays to shop for roadside assistance insurance through multiple outlets. How much you pay will be determined by several factors, such as whether you want to buy basic coverage, or add-on enhancements. Sometimes, it is actually offered as a free benefit when you have accounts or do business with other companies.
Plans typically start at about $40 to $60 annually but can increase dramatically if you want to add on additional benefits beyond basic coverage, such as extended towing coverage.
If price is a major consideration for you, here are several possible ways for you to get free or low-cost roadside assistance insurance:
Credit card companies
It’s a little-known benefit, but some credit card companies may offer cardholders free roadside assistance. American Express, Chase and Citi are three options among many. The main caveat here is that there is probably going to be a cap on the amount of benefits paid out per use, and other restrictions may apply, such as a limitation on how far a vehicle may be towed. But, if you rarely need to access emergency roadside assistance services, using a credit card benefit may be the way to go.
Some new and used car companies have warranties that include roadside assistance. It can be used for a variety of services, such as when you run out of gas or lock yourself out of your car. Noted auto research firm Edmunds.com has compiled a list of which manufacturers provide roadside assistance coverage which can extend out as far as 100,000 miles in some cases.
If you are a member of an auto club, you can get low-cost roadside assistance insurance in many cases. The American Automobile Association (AAA) is the largest of all auto clubs and has three membership tiers you can purchase with annual costs ranging from less than $50 to as much as $130.
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Wireless service providers
Most major carriers such as AT&T and Verizon offer roadside assistance for minimal costs. Check with your carrier to see if they offer this as a benefit that typically includes locksmith assistance, gas and tire changes, among other services. Below are some helpful roadside assistance numbers for you to save.
- Verizon roadside assistance number: 877-623-7433
- Att road assistance number: 877.263.2600
Auto insurance providers that offer roadside assistance
If you have collision and comprehensive insurance, you can probably add roadside assistance insurance to your existing plan.
Costs will vary somewhat based on the car you drive and where you live, but you might be able to add roadside assistance coverage for as little as $2 or $3 per month.
NOTE: One of the downsides of using an insurance company’s roadside assistance program is that, in some cases, your service calls could be treated like a claim. That could result in higher car insurance premiums. It’s best to ask this question up front if you are considering coverage through your auto insurance provider.
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Which roadside assistance insurance in the best?
It’s impossible to say which roadside assistance insurance plan is the best because the best policy will depend on your personal set of circumstances. Every roadside assistance plan is slightly different, and you need to take a variety of factors into consideration before deciding which roadside assistance insurance policy is the best for you.
- If your family has more than one car and multiple drivers, then you might want to consider a full-service plan, such as those offered by AAA, AARP or the GM Motor Club.
- If you frequently travel far from home, lean heavily toward the insurance plan that has the most generous towing allowance and trip-interruption benefits. Some policies will only provide towing coverage for as little as three miles. Others may provide coverage for as much as 200 miles or more. Some will only tow your car to the nearest repair facility but may offer to tow it to another place for an additional charge.
- If you own a new or certified used car and it is the only car you own, consider going with the automaker’s service to best meet your needs. You may actually already be covered for the life of the warranty, which is usually at least three years or 36,000 miles. Other automakers are more generous. For example, Hyundai certified used cars are covered for 10 years from the original date the car was put in service.
- If you or your family members shuffle among many cars, consider going with a cell-phone or credit card plan because they typically provide coverage in any car. The coverage follows the driver and not the vehicle.
- Make sure you read all the details of the policy you are considering. Many people are surprised to find out that their policies will not cover the cost of towing due to floods, fires or other natural disasters. It’s the last thing you want to hear when your car is floating down stream or is flooded up to the roof in an underpass because you got caught in a torrential downpour.
- Pay attention to how often you can use the service every year. Many policies restrict the number of service calls you can make. Once you exceed that amount, you will have to pay for the total cost of any assistance rendered. If you have a potentially high repeat user in your home (teenagers and seniors), then you might want to look for a policy that has a generous number of calls that you can make.
- Check to see if the coverage includes other vehicles you drive. The best information here is that it will depend on who you get coverage with. Auto manufacturers only provide coverage for their specific cars, but other plans follow the driver. This means you’re covered with rental cars, vehicles you borrow, or cars you are assigned through your employer for full-time personal use.
- If you really want to do your homework, check online for complaints. If you notice a pattern of members having to wait for hours to get assistance, or vehicles that were damaged when services were provided, these and other things could be red flags alerting you to steer clear of the provider.
- Are there sign-up or cancellation fees? Some providers may charge you for one or both. May sure to ask before you buy.
- How easy is it to access service? In most cases, there will be a toll-free number you can call on a card that will be provided to you with your policy. Some providers also let you use a smartphone app to call for assistance. The app provides your exact location using your phone’s GPS capabilities. Higher end policies, such as OnStar which is equipped in General Motors models, allow you to call for roadside assistance while speaking with an agent at the touch of a button.
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Where can I purchase roadside assistance?
There are a lot of places you can buy roadside assistance insurance. For convenience, we’ve gathered close to 50 of the best companies to buy roadside assistance insurance.
Whether it’s an insurance company, vehicle manufacturer, cell phone provider, or auto club, you have plenty of good options.
Which roadside assistance is best?
Companies indicated in bold are highly-rated providers that sell roadside assistance coverage.
- AAA Roadside Assistance
- AARP Roadside Assistance
- Good Sam Roadside Assistance
Credit Card Companies
- American Express Roadside Assistance
- Allstate Roadside Assistance
- Farmers Roadside Assistance
- Geico Roadside Assistance
- Liberty Mutual Roadside Assistance
- Nationwide Roadside Assistance Coverage
- Progressive Roadside Assistance
- Safeco Roadside Assistance. You should also check out the safeco roadside assistance app.
- State Farm Roadside Assistance
- Travelers Roadside Assistance
- USAA Roadside Assistance
- Acura Roadside Assistance
- Audi Roadside Assistance
- BMW Roadside Assistance
- Cadillac Roadside Assistance
- Chevrolet Roadside Assistance
- Chrysler Roadside Assistance
- Dodge Roadside Assistance
- Ford Roadside Assistance
- GM Roadside Assistance
- Honda Roadside Assistance
- Hyundai Roadside Assistance
- Infiniti Roadside Assistance
- Jeep Roadside Assistance
- Kia Roadside Assistance
- Lexus Roadside Assistance
- Mazda Roadside Assistance
- Mercedes-Benz Roadside Assistance
- Nissan Roadside Assistance
- Subaru Roadside Assistance
- Toyotacare Roadside Assistance
- Volkswagen Roadside Assistance
Car and Truck Rental Companies
- Enterprise Roadside Assistance
- U-Haul Roadside Assistance
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Cell Phone Companies
- ATT Roadside Assistance
- Sprint Roadside Assistance
- Verizon Roadside Assistance
Can I use roadside assistance from my home?
Yes. Unless your policy specifically excludes it, you can call for services even if your car is disabled at your residence.
5 reasons people call roadside assistance to their home.
- I need to fix a flat, I wonder if my roadside assistance can patch a tire?
- My kids locked my keys in the car
- It’s cold out and my car won’t start
- I left my lights on and my battery died
- I ran out of gas in my drive way
Can I get roadside assistance for a motorcycle?
Roadside assistance is available for both recreational vehicles and motorcycles. All services for these vehicles are pretty much the same as they are for traditional passenger vehicles. In addition to buying coverage through normal channels, motorcycle riders who are members of the American Motorcyclist Association can also get roadside assistance coverage through that organization as well.
Can I get roadside assistance for an RV?
In addition to standard services, RV coverage may also include double extraction services, free car rentals and travel interruption coverage that could pay up to $1,500 for unexpected emergency expenses for meals, lodging, car rental, and transportation home or to your destination.
Can I get roadside assistance for a semi-truck?
Commercial truck roadside assistance is also available but expect to pay more than for a regular passenger vehicle. One of the biggest benefits that commercial coverage offers is dispatching a mobile mechanic to reduce downtime issues for business owners and operators. Coverage is available for trucks, trailers, buses, vans, and all manners of utility vehicles. Towing is typically more liberal in terms of the number of miles and 50 miles per tow is fairly standard.
What about roadside assistance for rental cars?
This will depend on what kind of roadside assistance coverage you select. In some instances, policies only cover a specific vehicle, such as new or used certified vehicle coverage. Other policies cover the driver and not the vehicle. For example, AAA coverage would transfer to any vehicle you drive. When you rent a car, you may also be offered optional coverage for roadside assistance.
How should higher-use groups such as seniors or new drivers affect my decision?
Statistics show that senior citizens and new drivers are more likely to need roadside assistance services than most other groups. As such, when deciding on what kind of policy to buy when you are in one of these groups, or if you have family members in one of these groups, look for a policy that is more forgiving in terms of the number of times that services can be accessed before you reach a limit and are charged full price for towing or other related services.
If you have a driver with a disability in your family, buying roadside assistance insurance is also a wise investment. Doing so will give you and that driver added peace of mind since they will be less equipped to react to a minor emergency in many instances.
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Other common roadside assistance questions
Can Roadside Assistance be used to fix a flat?
Absolutely. Roadside assistance statistics show that flat tires are one of the most common roadside assistance claims.
Think about it, do you want to change a flat on the side of the highway? No way! The best thing you can do to is call your roadside assistance company to fix a flat. They will show up with the necessary tools as well as the warning lights to make sure other drivers are aware and slow down to improve safety.
Also, sometimes we hear people as “can roadside assistance be used to patch a tire”. Typically roadside assistance companies aren’t going to patch a tire, but they will install your spare so you can drive to a tire repair shop. If you do not have a spare tire, your roadside assistance company will coordinate towing your car to the nearest repair shop.
Can Roadside Assistance be used unlock a car?
Yes. Tow trucks carry an amazing tool called a “big easy”. It’s a great tool that allows the roadside assistance driver to get into your car without damaging paint or breaking windows. A good roadside assistance service rep can often unlock a locked car in 60 seconds or less, it’s very impressive to watch!
Can Roadside Assistance be used for gas?
Based on your policy guidelines, roadside assistance insurance will cover up to a gallon or two of gas. This is usually enough to get you to the closest gas station. If you’re not within driving distance to a gas station, you can use your roadside assistance towing.
Can Roadside Assistance be used for towing my car?
Last but not least.
Yes, your roadside assistance insurance policy can be used for towing your car. They will have certain restrictions on distance, so you may need to tow it to a location other than your normal service shop. If you don’t know your towing distance, you can call the number on the back of your card and your roadside assistance company will explain your towing benefits included in your policy.
Conclusion: Final Thoughts on Roadside Assistance
Although roadside assistance coverage is limited in terms of the services it provides, when you need the type of help that it affords you, it will definitely feel like money well spent.
Because there are so many options, make sure you shop around for the policy that offers the best options to suit your particular needs. Take into account the age of your vehicle, your driving habits, who else in your family will need coverage, what kind of money you want to budget for this kind of protection, how many service calls you get per year, and other considerations that are important to you.