4 perks that save you cash after a car mishap

Chris Kissell

Crash a car, and your wallet is likely to take a hit, too. If the accident is minor, you will still have to pay a deductible, and your rates may go up.

Totaling your car could require you to purchase new wheels. Unfortunately, the check that arrives from your insurer may be smaller than you expect, thanks to your car's depreciated value.

However, some insurance companies offer perks that can help save you money in these situations. Following are four such bonuses:

1. Full replacement value for a totaled car.

Some people do not realize that if their car is totaled, they will get a check for how much the car is presently worth - known as its "actual cash value" - instead of how much they paid for the vehicle.

Once you drive a new car off the dealer's lot, it loses 11 percent of its value, according to Edmunds.com. So, if you round the corner and are involved in a smash-up that totals the car, you can kiss that 11 percent goodbye.

That is, unless you have some type of full replacement value coverage. Car insurance companies like Allstate, Liberty Mutual, State Auto and MetLife offer such optional coverage. Typically, you pay a small fee for this service.

For example, Allstate policyholders can purchase full replacement value coverage as part of the company's Your Choice Auto insurance packages. Policyholders who have this coverage and total their car within the first three model years receive a check for a new car instead of for the depreciated value.

Justin Herndon, an Allstate spokesman, says it is difficult to estimate a cost for this extra coverage, as it varies by state and type of vehicle, among other factors.

"It's safe to say, though, that the extra coverage would be an additional charge that is equal to a small percentage of your premium," he says.

He adds that this benefit varies according to state regulatory standards. But in general, policyholders receive a benefit that does not exceed the cost of a new auto of the same make and model with the same equipment.

If a new auto of the same make and model with the same equipment is not available, the policyholder is entitled to a benefit matching the cost of a new auto that is:

  • Similar in size, class, body type and equipment.
  • Similar in price to the price you paid for the auto being replaced, as adjusted for inflation, but not to exceed an amount equal to 110 percent of the manufacturer's suggested retail price of the auto being replaced.

In addition, the new car benefit applies only in the event of a covered total loss due to physical damage. A loss tied to fire, theft, larceny or flood is not covered.

2. Accident forgiveness.

Typically, a driver who is at fault in an accident will see his car insurance premium increase. However, some insurers offer accident forgiveness which is a promise to not hike rates after a policyholder's first at-fault crash.

Some companies offer accident forgiveness for free, such as Liberty Mutual, Progressive and Ameriprise. Still, other companies may require you to purchase accident forgiveness and other product features separately as endorsements to the base policy, says Brian Levy, senior vice president and auto product manager at Liberty Mutual Insurance.

You should ask your insurer whether you will have to pay an additional fee to have it added to your insurance policy, Levy says.

3. No-deductible glass repair.

It's a frustratingly common experience: You are driving down the highway when a stone flies up and dings your windshield. If you have comprehensive and collision coverage, your insurance company will bear the cost of replacing or repairing the glass. But a deductible likely will apply, and you will pay it.

However, in some cases, the windshield can be repaired at no cost to you. For example, companies such as Nationwide, Geico and Progressive waive the deductible if your windshield is repaired, rather than replaced.

"A windshield may be a great candidate for repair if it has no more than 3 chips or bull's-eyes, or a crack that is less than 6 inches long and outside of the driver's primary viewing area," says Patrick Burnett, Nationwide associate vice president of technical claims.

Nationwide customers who carry comprehensive coverage do not pay a deductible if they have their windshield fixed. If the customer is not satisfied with the repair, he can elect to pay the deductible and have the windshield replaced, Burnett says.

4. Loss-of-use coverage.

A car accident can put your wheels of commission for a while. If you have loss-of-use coverage, you will receive funds for a rental car or other form of transportation while your car is being repaired. That is true even if you are at-fault in the accident.

Many insurance companies offer this coverage for a small fee. At Liberty Mutual, policyholders who have loss-of-use coverage and who use a repair facility approved by the insurer are reimbursed for car rental fees for as long as it takes to repair the car, Levy says.

"Rental coverage for customers who choose to use a repair facility outside of that network would be provided for a maximum of 30 days," he says.