Should I purchase towing and rental reimbursement coverage
for my car?
For many individuals, driving a car is a necessity. Whether
you're driving to work or running errands on the weekend, not having your main
source of transportation for even just a week or two can have a major impact on
your daily routine. As a result, you'll want to make sure your transportation
needs are properly covered in case your car is ever disabled or in an accident.
Fortunately, in addition to standard auto insurance coverage, most insurers
offer optional towing and rental reimbursement coverage for an additional cost.
You can usually purchase towing coverage for a small
premium. This type of coverage will pay for any towing and labor charges (up to
a specified limit) incurred when your vehicle is disabled. This coverage can be
used any time your car breaks down — not just when it's in an accident. Keep in
mind that the insurer usually pays only for labor performed (e.g.,
jump-starting a battery, changing a tire) at the location where your vehicle is
disabled and does not cover actual repair work performed at a service station.
Towing coverage is convenient to have, especially if you
travel a lot in your car. However, if you already have roadside assistance
through another source (e.g., a road and travel plan), you may not need to
purchase towing coverage.
Rental reimbursement coverage pays a set amount per day for
the cost of a rental car if your car is being repaired because of an accident
that is covered under your auto insurance policy (some policies also provide
coverage when a vehicle is stolen). Typically, this type of coverage is limited
to a certain amount per day (e.g., $30), up to a maximum amount (e.g., $900).
For an additional premium, the daily limit can usually be increased.
Whether you need rental reimbursement coverage for your car
will depend on your transportation needs. If you own two vehicles or have
access to an alternative means of transportation, you may be able to get by
without it. However, if your car is your main source of transportation, it may
be a worthwhile purchase.