Adding Car Insurance Coverage to an Existing Policy

Auto insurance is an art form. It takes skill and savvy to create an auto policy that is balanced and cost effective. While I worked as an insurance agent for a few years in Oklahoma, I had the privilege to learn the ropes of the auto insurance business.

In this article I will discuss what I learned about why customers add new coverage and how to do it. I will also briefly touch on a few different ways you can add coverage yourself and when you need the help of an agent.

Reasons Customers Add Insurance

Out of the thousands of calls I received at my former place of employment, the main reason I saw customers add coverage to their auto policy was to protect their car in the event of a natural disaster, especially during tornado or hurricane season. The coverage that protects consumers from perils such as flooding, vandalism and hail damage is called comprehensive coverage.

Other reasons customers add coverage is because the customer financed a new vehicle. If the customer's policy does not meet the criteria of the auto lender (also known as the vehicle's loss payee,) the finance company will require the customer to raise or add coverage to the existing policy. This action usually requires the customer to call and add coverage before the customer drives the vehicle off the lot.

Adding coverage to an existing policy not only results in higher coverage for your vehicle, but a higher premium as well. It all depends on what coverage you add and when. For example, if you raise your liability limits slightly, you may not see a significant change in the premium. However, if you live in a tornado prone area and are adding comprehensive coverage in May with a very low deductible, expect a significant increase.

Adding Car Insurance

Adding car insurance can be done a few ways, depending on your insurance company and the state you live in. Some companies allow coverage additions via the Internet; whereas some companies require a phone call to ensure proper underwriting precautions are followed.

In any case, the best practice is to call your insurance company before adding additional coverage. Additional coverage may be required for a financed vehicle. Adding coverage usually means adding to your premium as well. It is always best to call your agent to make changes or add coverage to your auto policy. Choosing a higher deductible may shave premium charges off your policy, but be prepared to pay out of pocket in case of a loss.