The options for additional coverage on an auto insurance policy are seemingly endless. Sometimes overwhelming. Where exactly do you draw the line? When is enough, enough?
What Is Auto Death Indemnity Coverage?
“Auto death indemnity” is a no-fault auto insurance coverage that offers a death benefit to you or the passengers of your vehicle in the worst case scenario.
This means the insurer will pay for the costs of a funeral for you or your passengers, regardless of whether you caused the accident or were a victim of someone else’s negligence.
Keep in mind that statistics dictate that the average funeral cost as much as $5,000 nowadays.
It’s no fun to discuss for any of us, but the facts are the facts, and regardless of your emotional state in the event of an untimely death, you will get no financial breaks when the worst occurs.
How Much Will the Insurer Pay?
There are options here. The insurer will pay up to the policy limit you purchased. Typically, you can purchase amounts of $5,000 or $10,000. Your insurance premium will reflect the amount of coverage you purchase.
The amount of coverage you should purchase, if any, depends on how well you are already insured, if at all.
Should You Spring for Auto Death Indemnity?
Shocker alert! The answer depends on a few different things. If you have other types of insurance you may not need to bother. Here are some other coverage types that may offer similar benefits.
Personal Injury Protection (PIP) – A good agent would have explained this fact to you. PIP normally offers a death benefit up to the coverage amount.
Health Insurance – many health insurance policies include coverage for funeral expenses.
Medical/Disability – Again, benefits may be included on these policies as well.
We at TTAI like insurance more than the next guy, but this coverage is a long shot. If you don’t have any other insurance coverage with this sort of benefit, auto death indemnity could be worth looking into.
However, if you are the type who purchases a liability-only (stay legal) policy, the odds of you wanting to cough up more money are pretty slim.
Note: There are insurance agents out there who will push this coverage on you…while also selling you PIP. If an agent tries to “oversell” you coverage, find another agent.