What Is Extended Coverage Insurance?
Extended coverage provides vehicle owners financial protection against different kinds of issues regarding your use of your vehicle. These types of coverage differ from one insurer to the next. They can also have a separate premium or be imbedded in the auto insurance policy. Perhaps the most popular types of extended coverage insurance are gap coverage, rental reimbursement, and towing and labor. Let us take a look at each of these types of extended coverage.
Gap coverage offers financial protection in case your car is totally damaged in an accident. What it does is cover the difference between the settlement you will receive for your vehicle and the remaining balance on your car loan. Rental reimbursement covers the cost you will incur should you need to rent a car if yours is sent to the repair shop after sustaining damage from a car accident. Towing and labor coverage handles the cost of taking your car to the repair shop when you have a road breakdown.
You may believe that the current auto insurance you have will give you adequate protection from any possible circumstances. But there are quite a number of situations that your existing policy does not cover. Extended coverage insurance has been designed to cover losses that you would normally not be protected against under a typical auto insurance coverage.
You can get an extended coverage that will protect you against vandalism to your vehicle that results in damage. Coverage against vandalism is not the same as property liability coverage that protects you from financial liability for damages you may cause to the property of another person. Nor is vandalism covered under your collision coverage.
When you purchase a brand new car these days you would typically enjoy a comprehensive warranty that will protect you from financial loss from the costs of repairing your car for three years. There are a great number of brand new cars that have what is known as extended “powertrain” coverage that protects your car’s transmission, engine, and all the parts that make it run. Extended coverage is provided by car dealers in cooperation with an insurance company. You have to ask yourself whether this type of insurance protection is for you or if you could just skip it.
Even if your vehicle is not brand new, you could still purchase an extended coverage if you feel you need it. Extended coverage is just like a checklist of insurance coverage for the types of damages that are not typically covered by your typical auto insurance policy. They are added onto your comprehensive insurance coverage and would take effect should the damage to the vehicle you have specifically named in your policy occur. Another type of extended coverage would be windshield replacement. This type of damage would be what is considered a non-collision occurrence depending on how it happened. Sometimes a stray rock falling on your windshield can shatter it and your extended coverage would kick in to pay you the cost of replacing your shattered windshield. You have to make sure that what goes into your comprehensive policy is windshield replacement coverage as some policies would indicate glass replacement which would only be for your back and side windows.
Buying Extended Warranty Coverage
A thing to remember about extended warranty coverage is that you can opt not to buy it from your car dealer. You have the freedom to shop around for competitive prices and better warranties. No dealer would lock out the extended warranty to your car purchase, so if your dealer tells you that you cannot purchase extended warranty elsewhere, you should find a better car dealer. The fact of the matter is extended warranty can be purchased any time, especially after the expiration of the factory warranty, the premiums would surely go higher as your car ages but it is still something you can have years after you have purchased your car.
The only convenience that can be offered by car dealerships when it comes to extended warranty is to incorporating its price into the total amount of your car. Some dealers offer factory warranties, which would be a good idea for buyers if they do not mind paying a little extra for these warranties as they tend to be more expensive than those offered by third party warrantors.