Insurance is all about just in case. You carry liability insurance just in case you have an at-fault accident and someone gets hurt or property gets damaged. You probably also have collision and comprehensive insurance just in case your own vehicle is damaged in a wreck. It’s likely you have other types of coverage to protect yourself—just in case—from uninsured/under-insured drivers or from having to foot the bill for medical payments for injured passengers (or yourself). Many insurance companies also offer towing and rental car reimbursement just in case your vehicle needs a tow or just in case you need a rental car while yours is in the shop. Note that towing and rental coverage are both entirely optional. They cost extra, and you don’t have to buy them. So why would you purchase these insurance add-ons when you don’t absolutely have to? “Just in case.”
An insurance towing benefit is a reimbursement from your insurance company if your vehicle needs to be towed to an auto shop for repairs. You generally get to pick your preferred level of coverage, which will range between $25 and $75 per incident. Anything over that amount would be your responsibility to pay. According to industry sources, the actual cost to tow a vehicle varies widely. Generally there is a hook-up fee, which is the base cost to get the tow truck to your vehicle’s location, and a cost per mile on top of that. Averages vary from $35 to $100 or so for the hook-up and $2.50 to $5.00 per mile towed. The further from civilization you break down—the further the tow truck has to drive—the more you’ll pay for a tow. Note that the towing benefit can generally be used for mechanical breakdowns as well as accident-related towing. In other words, unlike rental car coverage, towing reimbursement is not tied to an accident or incident related to your insurance. Some insurance companies sweeten the deal by providing roadside assistance services to help with flat tires and empty gas tanks. The good news is that towing coverage is relatively inexpensive. You’ll generally pay between three and four cents per day for this benefit, or about $10 to $15 annually.
Rental Car Coverage
Rental car coverage reimbursement covers or supplements the cost of a rental car while your vehicle is being repaired following an accident. If someone else is determined to be at fault for an accident that damages your car or truck, your insurance company will generally try to recoup the cost of your rental from the at-fault driver’s insurer. In situations where you are at fault—or in cases like vandalism or weather damage—your coverage will kick in and your own insurance company will reimburse you. The cost for rental reimbursement coverage varies from company to company. Almost all insurers impose limits on the amount of daily coverage (generally between $30 and $50), as well as the total coverage per incident. Sometimes the total limit is expressed in time (30 days, for example), or it may be a dollar amount (such as $750 or $1,000). Rental car coverage is generally between $60 and $80 per year, or around 16 to 22 cents per day.
Should You Opt for the Coverage?
Is this coverage worth the money … just in case? Just ask yourself whether you’d be able and willing to pay out of pocket for towing and rental car charges. Or would you prefer to pay a little each month to ensure that you don’t have to foot the whole bill the next time you need a tow truck or the next time your car is damaged in an accident?