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Where's the beef? Avoiding auto insurance fillers and extenders

By Gina Roberts-Grey Posted : 02/04/2011

Auto insurance fillers A recent lawsuit claims Taco Bell has crossed the border into sacrificing food quality in the name of profits.

The suit accuses the fast-food restaurant of using a filling in its menu items that is less than 100 percent meat.

For the record, Taco Bell says the suit is "bogus and filled with completely inaccurate facts." But the next time you bite into a chalupa and wonder "Where's the beef?" let your mind wander to the possibility of fillers and extenders in another unexpected place: your auto insurance.

Shopping for the right auto insurance policy can be tricky. There are core coverages everyone needs. But you don’t want to pay for a policy crammed with expensive extras.

Here are some tips to make sure you get some meaty insurance.

Core coverages in your auto insurance policy

Even if your No. 1 focus is cheap insurance, it's usually a mistake to skimp on the core coverages in your auto insurance policy.

"You can only shave so much off an auto insurance policy," says Jennifer M. Nelson, an Allstate agent in Iselin, N.J.
Liability coverage is one place where you don't want to cut back. It can protect you from financial ruin in the event that you seriously injure another party in an auto accident or cause extensive property damage.

"Liability is the biggest item on the menu, and the one that you need to afford," says Nelson. "If you can't afford a policy with a lot of 'condiments' added on, lop off those extras and go for liability."

Most states require you to have a minimum level of liability coverage in an auto insurance policy in order to drive legally. But don't let a desire for cheap insurance compel you to opt for coverage levels too low to protect your assets in the event of a lawsuit.

Nelson says you need enough liability coverage to protect your savings and other investments, like the equity in your home. Even your future income can be at risk if you're at fault in an accident and are sued.
You should also think twice about cutting back on uninsured and underinsured motorist coverage (UM/UIM), Nelson says.

"Uninsured and underinsured motorist coverage isn't often talked about, but could be critically important if you're in an accident and the other person at fault doesn't have enough coverage to compensate you (or members of your family) for your injuries," Nelson says.

Collision and comprehensive coverage are must-haves if your car is financed or leased, adds Chad Bitterlich, vice president of Navion Insurance Associates in Anaheim Hills, Calif.

"The finance company requires this coverage until the car loan is paid in full," Bitterlich says.
Once your car is paid off, you can drop that coverage. "But you shouldn't drop it to afford flashy add-ons," he says.

Auto insurance fillers and extenders

After nailing down your essential liability coverage, it's time to look at other items and decide whether they are useful or are mere fillers or extenders.

Bitterlich says insurance companies may offer coverages that duplicate what you already have.
"In some cases, an agent will talk you into lowering coverage so you can have several extras," he says.
Options such as identity theft coverage, a "vanishing deductible" and "accident forgiveness" may appear to be a value, "but beware – they usually cost extra," he says.

Other fillers and extenders to avoid include:  

  • Towing. Bitterlich says this is nice to have but is only needed if you have an older car and aren't already paying for coverage under another plan. "Many new cars include roadside assistance from the car manufacturer." And if you're already paying for AAA membership or roadside assistance provided through a credit card, take a pass on this filler.
  • Rental reimbursement. Nelson says if you have another car to drive, skip this item. "You don't need to pay for what you already have – another car to drive," she says.
  • Glass coverage. Pass on this unless it isn't already part of your comprehensive coverage and there's no deductible. "Often, glass replacement is less than the deductible and many major glass repair companies will give you the 'special insurance pricing' if you ask nicely and get a referral from your agent," Nelson says.
  • ID theft protection. Bitterlich says this is an unnecessary expense if you have separate identity theft protection through your credit card or another ID protection service. "Use the money you'd pay for this coverage to up your liability," he says.
  • Personal injury protection (PIP) or medical payments coverage. Following a car accident, this type of coverage picks up the cost of your medical expenses and – in the case of PIP -- lost wages and rehabilitation expenses. Some states require you to purchase at least minimum levels of PIP or MedPay coverage. But spending more than the minimum may be a waste of money if you already have health insurance.

Bitterlich also urges you to avoid one big extender – automatic renewal of your auto insurance policy. If you're switching car insurance companies, you need to proactively cancel your old policy to avoid paying for two policies.

"Call your agent at least 30 days in advance to notify him you're moving on," Bitterlich says.

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