I have a love/hate relationship with Roadside policies
Let’s start with what I love about them. They are VERY inexpensive. The typical cost is about a dollar a month. They can cover things from running out of gas, getting locked out of your vehicles, or needing a tire changed. For the once in a decade lapse in judgment or flat tire, these policies are wonderful!
How can you say no? I tend to agree but did you know that too many roadside claims can impact your insurance rate?
Frequent roadside claims can lead to an increase in premiums! That is right! Insurance companies are using a wide array of information to determine the premium to make certain clients profitable. Insurance scores, MVR history, gender, vehicle types, mileage, claims, and roadside history can all be used to determine insurance premiums. Statistically speaking, roadside claims should be infrequent. A vehicle that requires constant roadside assistance can become a hazard. Further, what is the client doing or not doing that is causing this vehicle to need that much attention or emergency services?
Ever heard that there is no such thing as a free lunch? The hidden cost of roadside assistance is that it can be built into your auto insurance premium. So what do you do? Well, let’s go over when its wise to have roadside from your insurance company, and when it would be better to get a standalone policy through an Auto club, auto manufacture, or cell phone provider.
- Do you travel frequently?
- Frequent road warriors, be it for work, or pleasure, should consider a stand-alone policy.
- Given the higher than usual frequency, these claims will not impact your auto insurance rate.
- There are greater benefits, such as discounts when traveling, and trip interruption coverage.
- Many roadside assistance policies through insurance companies have a tow mileage limit, typically within 25-50 miles. This means road trips can be expensive if you find yourself between Dallas TX and Atlanta GA.
- Do you have more than two drivers and two vehicles?
- Frequency is what we are trying to avoid. With more drivers and vehicles, there is just a statistical expectation that the frequency would be higher.
- Do you own older vehicles?
- The whole point of buying a brand new car is for the new car smell, the new features, and the lack of maintenance. Yet this comes at a significant premium!
- For clients who don’t need the latest and greatest, a stand-alone roadside policy would be a better fit!
- Do you have more than three roadside claims with any insurance provider in the last 5 years?
- Frequent claims can have an adverse impact on your rates!
- If you have multiple claims, consider a stand-alone policy to help reduce future increased premiums.
Standalone roadside assistance policies can cost between 50-500/year!
Why? For one, they are not using your auto insurance premiums to hedge the cost. Another thing to consider is that they are designed for the frequent driver who may need more coverage than a standard insurance provided roadside policy will offer. For example, AAA Premier provides towing up to 200 miles/year, a robust trip interruption benefit, rental car coverage, locksmith services, and you can add motorhomes, and trailers to their policies.
Here is a bonus tip. Should your vehicle become disabled during a covered loss, be it a deer jumping out in front of your vehicle (comprehensive), or getting into an auto accident (collision), the claim will cover the cost of towing the vehicle. That right, you do NOT need roadside assistance to get your vehicle towed in the event of a covered loss.
We hope this article helped you better understand the in’s and outs of the current insurance environment. While becoming an expert in insurance isn’t necessary to get the best rate, we recommend partnering up with an independent insurance agent like us! Since we represent multiple insurance companies, it gives us more choice and exposure. We are less likely to be pushy since we have several choices vs a single offering like Allstate/State Farm/Farmers agents.