3 Lesser-Known Auto Insurance Coverages You May Need

Auto insurance policies contain some coverages that are mandated by law and others that drivers commonly get. For example, most policies have personal injury protection, liability protection, and comprehensive and collision protection. These aren't all of the auto coverages you may need, though. Here are three lesser-known protections you might want to also get.

Gap Coverage

Gap coverage is specifically for drivers who lease or finance a car, and most drivers who sign a lease or loan agreement are bound by the terms of that agreement to get this protection.

What gap coverage protects is the monetary difference between a car's fair-market value, and the outstanding balance on a lease or loan. Because cars usually depreciate faster than lease and loan payments are made, a difference or a gap between what a vehicle is worth and what a driver owes develops.

Should a car be totaled when more is owed than the car is worth, gap coverage will pay the difference to the lender on the driver's behalf. This ensures that the driver isn't stuck with a car payment for a car that's no longer operational.

If you have a lease or a loan on a car, you're likely required to carry this coverage.

Rental Reimbursement Coverage

Rental reimbursement coverage helps pay to get a rental car if an insured vehicle while an insured vehicle is out of commission following a covered incident. 

For example, assume your car is damaged in an accident and the damage will take two weeks to repair. You'll still need a car during this time, and rental car reimbursement coverage ensures that you can get a rental car for nothing out-of-pocket. The full cost of a rental will be covered, up to your policy's applicable limit.

If you have access to another car in the event that you need one, this coverage isn't necessary. You can use a friend's or family member's car instead of renting one should your car be rendered inoperational.

If you don't have access to another vehicle, however, rental car reimbursement can prove to be an invaluable protection. Without it, rental costs could quickly add to the total cost of an accident or other incident.

Ride-Sharing Coverage

Standard personal auto insurance doesn't extend coverage to business-related driving, which ride-sharing is. If you offer ride shares as a side hustle or full-time gig, you'll need ride-sharing coverage to protect you while you're working.

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