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Extended Auto Insurance Coverage: Things You Need to Know

Auto Insurance Coverage

Car insurance is a mandatory form of coverage that is designed to protect the driver in the event that they are involved in an accident.

As for extended insurance coverage, it is a form of additional coverage that will cover the cost of repairs for a new vehicle once the manufacturer’s warranty on the vehicle ends. Moreover, most car parts will be covered under extended auto insurance coverage.

However, most policies will not provide bumper-to-bumper coverage, which is commonly included with the purchase of a new automobile. In this article, we will discuss the things you need to know about extended auto insurance coverage.

Understanding Extended Auto Insurance Coverage

Extended car insurance is an elective type of coverage that provides drivers with additional security. You may require some funds in order to pay for car servicing costs in the future, and your extended car insurance may thus be able to cover your servicing costs.

There are two different types of extended car insurance that you should be aware of.

First, you have extended warranties that are offered by carmakers. For example, extended warranties that are offered by original equipment manufacturers, such as Toyota or Chevrolet, may help cover repair and servicing costs on the vehicle that you purchased from them.

Second, third-party vendors may also offer their clients extended warranties upon request. Aftermarket warranties are commonly offered by warranty and insurance companies that are not affiliated with a particular automobile manufacturer.

There are many benefits to obtaining an extended warranty. For example, an extended warranty may provide additional perks, such as roadside assistance, in the future.

As well, if your car’s model and make has a history of service requirements, or you drive a car that is quite old and will require more service over the years, then an extended insurance can save you quite a bit of money.

In sum, basic auto insurance coverage is mandatory, but extended auto insurance coverage is not. However, obtaining extended coverage may help save you thousands of dollars over the years on your vehicle.

What are the benefits of an extended auto insurance policy?

An extended warranty will provide you with greater car value. That is, your policy will actually increase in value as your automobile ages. The trade-in value of your car will be greater when you are ready to move on to another vehicle in the future, as it will likely be well maintained.

Customer satisfaction will also be improved. You will have peace of mind knowing that you can take your car back to the same place where you purchased it in the event that it needs to be repaired or requires a tune-up.

You will be able to take advantage of existing relationships, which will improve the quality of the customer service over time. You will also enjoy added convenience.

Car issues can be very stressful, so many drivers will purchase extended warranties to avoid the disruptions that come with a car breaking down. For example, an exemplary extended warranty policy will cover your hotel, towing, and rental vehicle costs if your car breaks down or is damaged.

It will also cover meals and anything else that you need in order to get back on the road as soon as possible. In addition, your extended warranty will ensure that only original parts will be used in order to fix your car.

What’s more, there are no one-size-fits all plans to worry about. Instead, your extended warranty plan will be custom-tailored to your needs and the current and future requirements of your vehicle.

What are the limits of a typical auto insurance policy?

Liability coverage limits are typically written out in three numbers, such as 20/40/20. In this particular illustration, the policy owner would have a $20,000 limit per individual in the event of injuries incurred in an accident.

The policy owner would also be covered by up to $40,000 per accident (both bodily injury and property damage).

Uninsured motorist coverage limits are usually broken down into two figures. The first figure outlines the per person limit followed by the per accident limit figure (e.g., $20,000/$40,000).

Uninsured motorist property damage limits tend to be written out in only one number. The number indicates the maximum amount that would be paid out per automobile accident. Limits tend to range between $10,000 and $25,000 in most cases.

As for comprehensive and collision coverage limits, they are the equivalent of the monetary value of your automobile at the time of the accident.

In the event that the damages are greater than the current value of your car, then you may need to pay out of pocket to cover the additional expenses.

Is it necessary to have extended automobile insurance?

While extended auto insurance is not necessary, it can help protect the various components of your car in the event that it is involved in an accident or requires general repairs or maintenance not covered by your standard auto insurance policy.

Certain car brands, models, and can be prone to damages or in need of frequent repairs, so purchasing additional coverage may help reduce stress and provide peace of mind knowing that your vehicle will be fully protected in the future.

You also do not need to obtain an extended warranty as soon as you purchase your car, but the best time to obtain additional coverage for newer models is while they are still under the original factory warranty.

By doing so, you will be able to keep the insurance cost down. You will also be provided with a wider selection of coverage terms.

In closing, labour and part costs continue to rise every year. If you want to protect yourself from inflation, then obtaining an extended warranty may save you quite a bit on auto repairs and maintenance down the road.

Better Safe Than Sorry

Car insurance is designed to protect motorists, passengers, and pedestrians. It is also mandatory, and will help reduce hassles and stress down the line. While you will be required to pay now, you will save money and time in the not-too-distant future.

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