Common Auto Insurance Endorsements and Different Types Available

In the political season, we hear a lot about endorsements. One candidate is endorsed by the NRA; the other by PETA. Newspapers list their endorsements, which conspicuously seem to favor the incumbents. And of course, there are the million dollar endorsement contracts for NBA superstars that sell $100 shoes to poor kids in the inner-city, that were made for $0.05 an hour by poor kids in the third-world. All of this activity seems to give endorsements a bad name, but when it comes to car insurance quote, endorsements can be a financial lifesaver!

A car insurance endorsement is an attachment to a policy that is used to extend, restrict, or clarify coverage with regard to perils, locations, “insureds,” or exposures. Some of the most common car insurance endorsements are towing and labor costs, miscellaneous vehicles, personal injury protection, and underinsured motorists coverage.

Towing and Labor Costs

Towing and labor costs is a great endorsement to have on your car insurance. It provides coverage for on-the-scene emergency road service, and towing costs up to a specified amount per vehicle. As anyone who has ever had to pay out-of-pocket knows, towing can be quite expensive, so this endorsement can be worth it if it doesn’t cause your auto insurance rates to go up significantly. As always, it is important to consider the benefit vs. the cost, because car insurance is a financial product that should provide value - otherwise, you are just throwing your premium dollars away.

Miscellaneous Type Vehicles

Standard personal car insurance policies cover only private passenger vehicles that have four wheels and are designed for use on public roads. A miscellaneous type vehicles endorsement can be used to extend your policy to vehicles such as motor homes, motorcycles, and dune buggies. Also, this endorsement can provide coverage for standard vehicles owned by two or more relatives other than husband and wife, or by unrelated people who live together.

Personal Injury Protection

This endorsement applies to no-fault insurance states. Whereas no-fault states typically disallow claims for pain and suffering, people with a PIP (personal injury protection) endorsement can seek to recover pain and suffering damages from their own insurance company. This is a very important endorsement to consider if you live in a no-fault state, particularly a comparatively strict one like Michigan.

Underinsured Motorists Coverage

Not to be confused with uninsured motorists, underinsured motorists coverage deals with negligent drivers who have at least the legally required minimum insurance, but not enough coverage to satisfy a claim for damages. Once the negligent driver’s insurance limit is reached, the victim has to sue the driver personally. But if the negligent driver does not have the ability to pay the damages, victims without underinsured motorists coverage are out of luck. If they do have this endorsement, however, they can receive damages from their own insurance company.

Car insurance is not a “one size fits all” proposition. Since each endorsement you add on causes your car insurance rates to go up, you need to carefully weigh costs vs. benefits. The best way to do this is to shop around. Talk with several agents and make sure you are getting the best bang for your insurance buck.