Car owners need auto insurance policies, as do others with a driver’s license and the potential to drive a car. One policy may differ from another due to the state in which the policy is issued, the insurance company that issues the policy and the policy endorsements. An auto policy endorsement increases or decreases a policy’s coverage to meet the needs of the policy holder.
Purpose of Auto Policy
An individual can purchase an automobile insurance policy for private passenger cars, pickups or vans that seat up to six people and that travel on public roads. The insurance helps a driver manage the risks of driving and owning a car, including a car accident. Without an auto policy, the driver is financially responsible for paying the expenses that result from a loss, such as a stolen car, car accident, driver or passenger injury, or the theft of the car.
Objective of Auto Policy Endorsement
A policyholder can increase the coverage provided by an auto policy by adding one or more endorsements. For example, the endorsement can effectively override the original auto insurance policy’s exclusion of particular drivers or vehicles. The insured arranges for endorsements through the company that issued the auto policy. An endorsement is an alternative to purchasing a separate policy to provide coverage for a particular vehicle not covered by the original auto policy, which is a more expensive option.
Types of Auto Policy Endorsements
An auto insurance policy holder can purchase a wide variety of policy endorsements. For example, the policyholder might contract for roadside assistance coverage in the event his car is in need of repair or a towing endorsement that pays to tow a car to a repair shop. Other endorsements include an auto rental if a car must be repaired, the purchase of a new car to replace a car that’s totaled in an accident, and pet insurance to pay veterinary bills if a pet becomes ill during a trip. Other types of endorsements include waivers, exclusions or special conditions. The state in which the policyholder lives determines the types of auto insurance policy endorsements that are available.
Auto Insurance Endorsements and Quotes
A potential or existing policyholder can obtain an estimate of the cost of an auto insurance policy and particular endorsements directly and in person from individual insurance companies. As an alternative, the policyholder can use the Internet to access company websites, many of which provide customers access to a rate calculator. Insurance rate calculators are also accessible on insurance broker websites. Using a broker site, a customer can obtain price quotes from multiple insurance companies simultaneously. When comparing quotes, the types of coverage must also be compared. For example, a quote for comprehensive and collision coverage can’t be compared with a liability coverage quote. In addition to comparing policy costs before purchasing a policy, the insurance company’s industry ratings and customer reviews should be compared.
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- State of Texas Office of Public Insurance Counsel: http://www.opic.state.tx.us/automobile/buyer-be-informed-not-all-auto-insurance-policies-are-the-same
- Erie Insurance: Additional Coverage — Auto Insurance Policy Endorsements
- Reply: Car Insurance Endorsements: An Overview of Options
- Maine: Bureau of Insurance: Consumer Guide to Auto Insurance
- DMV.org: Auto Insurance Endorsement
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