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Full coverage car insurance protects you against the most common causes of car damage and bodily injury: not just accidents but also theft, vandalism, fire, and more. Depending on the state you live in, it may also include Uninsured Motorist coverage, and Personal Injury Protection for yourself and your passengers. Liability, on the other hand, only offers financial protection against other drivers’ claims of injury and damage if you’re found at fault.

It can be hard to know how much insurance you need, and how to keep costs down. We’ll review the different types of policies available, pros and cons of each, and the average cost of full coverage vs. liability.

What Is Full Coverage Car Insurance?

Full coverage car insurance refers to a policy with the broadest protections available. Although specifics vary by policy, full coverage usually includes the following:

•   Liability: If you’re involved in an accident and found to be at fault, this type of insurance provides financial protection against other drivers’ claims of bodily injury and property damage.

•   Collision: Helps pay for damages to your own vehicle after an accident with another vehicle or an object like a guardrail.

•   Comprehensive: Protects you against theft or damage unrelated to an accident, such as fire or vandalism.

In some states, full coverage may also include the following:

•   Uninsured/underinsured motorist coverage (UM/UIM): Covers your losses if the other driver either doesn’t have insurance or not enough.

•   Personal injury protection (PIP): Covers medical expenses for yourself and passengers in your car if injuries occur. It may cover other costs, as well: lost wages, the cost of services that you can’t perform while injured, such as housekeeping, as well as funeral costs.

•   Medical payments (MedPay): This can cover medical expenses but doesn’t offer the fullness of coverage that’s available through PIP.

Check your state laws for specifics. This guide to car insurance terms can also be helpful.

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Recommended: Insurance Tips for First-Time Drivers

Average Cost of Full Coverage Car Insurance

The average full coverage car insurance cost in 2022 is $1,771 annually. Of course, many factors go into full coverage car insurance quotes, so your price will undoubtedly vary. The cost for a male teenage driver, for example, is $807 more each year on average.

A poor driving record will almost double your premiums. For more details, check out this look at how much insurance goes up after an accident.

Your deductible will also make a big difference in your premiums. In general, the lower the deductible, the higher the premium, and vice versa. So if you’re wondering how to lower your car insurance cost, consider choosing a higher deductible.

The cheapest full coverage car insurance is about $1,000 per year for an individual policy.

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Why Consider Getting Full Coverage Insurance?

You’ll have the broadest protections with a full coverage policy. Also, if you have a car loan, your lender may require you to have full coverage to protect their investment. The best way to determine how much coverage you need is to sit down for a personal insurance planning session.

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Pros and Cons of Full Coverage Car Insurance

There are advantages and disadvantages to paying for full coverage car insurance.

Pros of full coverage

•   Provides a broader range of protection:

◦   May cover medical expenses if you’re hurt in a collision

◦   May cover vandalism and theft

◦   Can protect you after an accident if the at-fault driver doesn’t have enough coverage

•   Typically meets all state insurance requirements.

•   Usually satisfies the requirements of your lender or lessor.

Cons of full coverage

•   Cost is higher than baseline liability insurance.

•   Doesn’t provide coverage for commercial driving purposes.

•   Won’t cover the cost of normal wear and tear.

What Full Coverage Insurance Doesn’t Cover

Although full coverage provides a significant amount of protection, it doesn’t cover every situation imaginable. It may or may not, for example, provide UM/UIM, PIP, or MedPay coverage. As noted above, full coverage also doesn’t account for standard wear and tear or maintenance needs on the vehicle — that’s up to you. Learn more about saving on car maintenance costs.

Because full coverage varies from company to company, it’s important to read your agreement carefully and understand what it does and doesn’t include.

What Is Liability Car Insurance?

There are two components to what liability auto insurance covers: bodily injury and property damage. If someone is at fault in an accident, their bodily injury coverage will pay for the medical expenses of injured parties. It may also cover lost income, legal fees, and/or funeral costs.

Property damage coverage helps pay for damage to the other person’s vehicle and to any other property that sustained damage during the accident, such as a fence, home, or bicycle.

Personal liability coverage is something different. It typically covers medical costs for someone injured on your property or because of your negligence. It may cover property damage costs, legal fees, and so forth.

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Average Cost of Liability Insurance

On average, a liability insurance policy costs $716 in 2022. But again, many factors — including your age, gender, driving record, and type of deductible — can influence the price.

Why Consider Getting Liability Coverage Insurance?

Most states require liability car insurance, although the specifics vary from state to state. do not require it. In New Hampshire and Virginia, you can skip liability insurance if you can prove you can pay for costs out-of-pocket after an accident where you’re at fault.

Pros and Cons of Liability Coverage Car Insurance

While it may be tempting to pay for only liability coverage, you need to keep certain drawbacks in mind.

Pros of liability insurance

•   Costs less than full coverage car insurance.

•   Provides basic coverage in case of an accident.

•   Required by most states.

Cons of liability insurance

•   If an accident occurs, you could still be on the hook for many costs (more on this below).

•   Won’t cover theft or vandalism of your vehicle.

•   If you have a loan or lease, the lender/lessor may require full coverage.

What Liability Insurance Doesn’t Cover

If an accident occurs, liability insurance won’t cover damage to your vehicle. For that, you need collision coverage. Liability may or may not cover your personal injuries. And if you’re not at fault in the accident, it doesn’t cover the other driver’s medical bills or property damage costs.

Differences Between Liability and Full Coverage Insurance

When weighing liability vs. full coverage car insurance, here are a few things to consider:

•   Full coverage car insurance costs more, but it also offers significantly more protection.

•   Liability auto insurance is required in most states, but full coverage is not.

•   If you have a car loan or lease, the lender/lessor will likely require full coverage.

•   With liability insurance, there’s no deductible. With full coverage, deductibles range from $500 to $1,500.

When To Add Optional Coverage

Optional coverage to consider include:

•   Rental car reimbursement: If your car is in the shop or otherwise out of service for more than a day, this pays for a rental vehicle.

•   Gap insurance: This is intended for cars that have a loan or lease. If the vehicle is totalled and you owe more than the value of the car, gap insurance pays the difference.

•   New car replacement: As the name suggests, if a car is totaled, you get a new car that’s similar to your previous one.

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What Are the State Minimum Requirements for Full Coverage?

How to read this table: Alabama’s requirements for car insurance are 25/50/25. This means that the state requires $25,000 of bodily injury liability insurance per person, with $50,000 for all bodily injuries that take place within a single accident, and $25,000 in property damage per accident. Just keep in mind that this is the minimum amount of car insurance you need.

State	Car Insurance Requirements	Additional Requirements
Alabama	25/50/25
Alaska	50/100/25
Arizona	25/50/15
Arkansas	25/50/25
California	15/30/5
Colorado	25/50/15
Connecticut	25/50/25	The state also requires uninsured/underinsured motorist coverage of $25,000 per person and $50,000 per accident
Delaware	25/50/10	The state also requires personal injury protection (PIP)
Florida	Property damage liability of $10,000 per accident and $10,000 PIP coverage
Georgia	25/50/25
Hawaii	20/40/10 and $10,000 PIP
Idaho	25/50/15
Illinois	25/50/20	Under state law, policies automatically include what’s required for uninsured motorist coverages
Indiana	25/50/25	This state also requires $50,000 in underinsured motorist coverage for bodily injuries
Iowa	20/40/15
Kansas	25/50/25	Along with uninsured/underinsured coverage ($25,000 per person/$50,000 per accident) and personal injury protection (PIP or no-fault)
Kentucky	25/50/25
Louisiana	15/30/25
Maine	50/100/25	Along with $50,000 uninsured coverage per person and $100,000 per accident, and $2,000 in medical payment coverage
Maryland	30/60/15
Massachusetts	20/40/5 and $8,000 PIP
Michigan	20/40/10
Minnesota	30/60/10	Along with $25,000 uninsured/underinsured coverage per person, $50,000 per accident, and $40,000 PIP
Mississippi	25/50/15
Missouri	25/50/25	Plus $25,000 uninsured coverage per person and $50,000 per accident
Montana	25/50/20
Nebraska	25/50/25	Plus $25,000 uninsured/underinsured coverage per person and $50,000 per accident
Nevada	25/50/20
New Jersey	15/30/5	Along with $15,000 PIP
New Mexico	25/50/10
New York	25/50/50 and $50,000 PIP
North Carolina	30/60/25	The state also has detailed specifics about required insurance coverage for uninsured/underinsured motorists
North Dakota	25/50/25
Ohio	25/50/25
Oklahoma	25/50/25
Oregon	25/50/20	Plus $25,000 uninsured coverage per person and $50,000 per accident, and $15,000 PIP
Pennsylvania	15/30/5	Plus $5,000 for medical payments
Rhode Island	25/50/25
South Carolina	25/50/25	Plus $25,000 uninsured coverage per person, $50,000 per accident, and $25,000 in property damage
South Dakota	25/50/25	Plus $25,000 uninsured coverage per person and $50,000 per accident
Tennessee	25/50/15
Texas	30/60/25
Utah	25/65/15
Vermont	25/50/10
Washington	25/50/10
Washington D.C.	25/50/10	$25,000 uninsured coverage per person, $50,000 per accident, and $5,000 property damage
West Virginia	25/50/25	Plus $25,000 uninsured coverage per person and $50,000 per accident, and $25,000 property damage
Wisconsin	25/50/10	Plus $25,000 uninsured coverage per person and $50,000 per accident

The Takeaway

Full coverage car insurance includes several different types of protection, which makes it popular with drivers who can afford it. Full coverage gives you liability protection (used when you’re at fault in an accident), collision (which pays for damage to your vehicle), and comprehensive (which protects against theft and non-accident-related damage). In some states, you’ll also get Uninsured Motorist coverage, Personal Injury Protection, and/or Medical Payment coverage. Liability coverage, on the other hand, only covers property damage and bodily injury in case you’re at fault in an accident. Auto insurance coverage requirements vary by state.

If you’re looking for affordable full coverage car insurance, we invite you to compare auto insurance quotes from top insurers. SoFi makes finding the right deal on car insurance easy.

Get a car insurance quote in just minutes.

FAQ

Is it worth having full coverage on a car?

If you have a loan or lease, you may be required to have full coverage. And you may want to get full coverage on a newer car to protect your investment even if you don’t have to. This can also be true of an older car that’s maintained its value.

What does full coverage come with?

It comes with liability insurance, collision coverage, and comprehensive insurance. It may come with additional coverages such as uninsured motorist coverage, personal injury protection, and/or medical payment coverage.

What are the benefits of full coverage?

This kind of policy provides you with a broad range of protections against not just accidents but fire, theft, vandalism, and other common threats. If you have a car loan or lease, full coverage may be required.

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Insurance not available in all states.
Gabi is a registered service mark of Gabi Personal Insurance Agency, Inc.
SoFi is compensated by Gabi for each customer who completes an application through the SoFi-Gabi partnership.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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When an insurance company determines that a vehicle is totaled — that is, so badly damaged that repairing it will cost more than it’s worth — the owner may be reimbursed for its actual cash value (ACV) instead of repairs. How much insurance will pay for a totaled car varies. The exact amount depends on the insurance company, where the driver lives, how much coverage they have, and other factors.

Knowing how insurance decisions are made, and how to manage your claim, can help you prepare for this scenario after an accident.

What Makes a Car a Total Loss?

An insurance company may declare a car a “total loss” if the cost of fixing it is more than the market value, or if it wouldn’t be safe to drive the car even if the repairs were made. The insurer also may make its decision based on how your particular state defines a total loss. (You can learn more about the terms discussed here and others in our guide to car insurance terms.)

Some states use a total loss threshold (TLT) to determine if a car is totaled. In these states, the damage must exceed a certain percentage of the car’s value. Missouri, for example, has an 80% TLT — which means if you were in an accident and your car worth $10,000 required more than $8,000 in repairs, your car could be declared a total loss. The repairs wouldn’t exceed the actual cash value of the vehicle, but they would exceed the state’s TLT. (Iowa has the lowest TLT in the U.S. at 50%. Colorado and Texas have the highest, with a TLT of 100%.)

Many states use a total loss formula (TLF) to declare a vehicle totaled. With this method, if the cost of repairs plus the salvage value of the car exceeds its actual cash value, the car is totaled.

If the insurance company thinks the damage could end up being more extensive than the adjuster’s initial estimate, it may use a lower threshold for declaring a total loss than what the state requires.

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What Types of Insurance Coverage Pay for a Totaled Car?

Whether your insurance will pay for a total loss (and how much it will pay) depends on your policy. This is when smart personal insurance planning pays off. There are a few types of coverage that might kick in if your car is totaled.

Collision Coverage

This coverage pays for damage to your own vehicle or property. That can include damage caused by crashing into another vehicle or running off the road and into a tree or fence. Even if you’re responsible for the accident, collision coverage will pay for the repairs, minus the deductible amount you’ve chosen. (Learn more about the types of deductibles in insurance.)

If you are found to be at-fault, however, you can expect your car insurance premiums to go up after an accident.

Recommended: How to Get Car Insurance

Comprehensive Coverage

Comprehensive insurance covers losses caused by something other than a collision, such as a weather event, hitting an animal, theft, or vandalism.

Property Damage Liability Coverage

This coverage pays for damage to your vehicle (or other property) if you’re in an accident and the other driver is found to be at fault.

Uninsured/Underinsured Motorist Coverage

If you’re in an accident and the other driver is at fault but isn’t insured or doesn’t have sufficient insurance, this coverage can cover your repairs.

New Car Replacement Coverage

With new car replacement coverage, if your car is totaled, your insurer will pay to replace your damaged car with a brand-new car of the same make and model (minus your deductible). Drivers looking for lower car insurance premiums tend to go with this extra, but it can save you big money in the event of an accident.

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GAP Coverage

If you owe more on your car loan or lease than what your insurance says your totaled car is worth, you could end up having to pay the difference. GAP coverage, short for Guaranteed Auto Protection, can help “bridge the gap” between your insurance settlement and what you still owe.

Recommended: Insurance Tips for First-Time Drivers

How Does an Insurance Company Decide How Much to Pay Out?

After an accident, you can expect your insurance company to assign an adjuster to handle your case. The adjuster will check out your damaged car and, as part of the assessment, determine the cost of repairs and if the car is worth repairing.

If it’s totaled, the adjuster will assign the car a value based on its pre-crash condition and what similar models are selling for. The “actual cash value” you receive will factor in the car’s age, wear and tear (inside and out), the car’s mileage, equipment you may have added, etc.

The payment you receive will help you buy a new car, but it probably won’t be enough for a new model of the same car (unless you have new car replacement coverage). And it may not be enough to pay off your loan or lease (unless you have GAP coverage).

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What Steps Should a Car Owner Take If a Car Is Totaled?

There are a few things that need to happen to get you back on the road ASAP after a serious accident:

Contact Your Insurance Company

No matter who’s at fault for your car’s damage, you should notify your insurance company immediately. Most insurance companies are available 24/7 to take your claim by phone, online, or app.

Assess the Damage

The insurance company will send an adjuster to inspect your car and estimate the cost of repairs.

Calculate Your Car’s Fair Market Value

The insurance adjuster will do some research to determine your car’s fair market value — and you can do some homework, too. You can use the Kelley Blue Book to get an idea of what your car was worth before the accident (using the make, model, mileage, and when you bought your car). Or you can check online to see what similar cars in your area are selling for.

Contact Your Lender

If you’re still paying off your car loan, or you’re in a lease, you should inform the financing company that the car was damaged. It’s also important to keep making payments until you settle your insurance claim, so you don’t hurt your credit.

Negotiate Your Insurance Company’s Payout

If you can convince the insurance company that your car was more valuable than the amount they’re offering, they may adjust the payment you receive. The insurer may ask you to provide paperwork that shows the car was worth more, so it’s a good idea to keep your receipts and maintenance documentation. Or you may decide to hire a private appraiser to see if you can get a higher estimate. (You’ll have to pay for this service yourself.)

Get Your Payment — And a New Car

If you own the car outright, the insurance company will send you the money — often within a few days. You can use it to shop for a replacement.

When you have a car loan, your insurer will send the appropriate payoff amount to your lender and the rest (if applicable) to you. If you have a lease, the insurer will send the payment to the leasing company.

What Happens to a Totaled Vehicle After Filing a Claim?

Generally, after an insurance company decides a car is a total loss, it will take possession of the vehicle and, when the claim is settled, sell it as salvage. But the car’s final destination may depend on state regulations and whether the owner wants the car back.

Can You Keep a Totaled Vehicle?

You can talk to your insurer about the possibility of buying back the totaled vehicle if you want to keep it for sentimental reasons, or because you think you can fix it or use it for parts. This is allowed in some states, but you may have to work with the local DMV to complete the purchase.

If you hope to get the car back on the road, you can expect to go through several more steps. It will have to be fixed and pass an inspection, and you’ll have to get a new title. You’ll also have to register the car and insure it.

If that turns out to be a few too many hoops to jump through, you may end up selling it to a junkyard yourself. Or you can sell the parts to interested individuals. You also may be able to donate the car to a local charity.

Before you negotiate with your insurer to get your car back, you might want to check on whether it’s legal in your state and — if you plan to drive it again — what kind of insurance you can get on a car that’s been declared a total loss.

Can I Decide If My Car Is Totaled?

No. The insurance company must decide if the damaged vehicle is a total loss based on its value and the cost of repairs.

Understanding Your Coverage

Being in a serious collision can be stressful, whether you’re responsible or someone else is determined to be at fault. You may be hurt or hospitalized. Understanding how car insurance works, and what it will and won’t cover, can help you prepare. And it might take your stress down a notch in the aftermath of an accident.

An accident may prompt you to reassess how much auto insurance you really need. After all, more coverage means higher premiums, and vice versa.

An online insurance marketplace can help you decide what types of coverage you want, and whether getting GAP coverage or a policy with rental car reimbursement coverage is a good strategy. Your lender or leasing company, as well as your state, also may have specific requirements for how much insurance you must carry.

Recommended: How Much Does Insurance Go Up After an Accident?

The Takeaway

If your car is so badly damaged in an accident that the cost to repair it will be more than it’s worth, your insurer may decide to declare the vehicle a total loss. This means the insurer will give you the car’s actual cash value (based on its condition just before the accident) instead of paying to have it fixed.

Of course, you’ll only receive payment if you have the right kind of insurance coverage. Even then, the settlement likely won’t be enough for you to replace your wrecked car with a new car of the same make and model. Also, if you owe more on your car loan or lease than your insurance says your totaled vehicle is worth, you can end up having to pay the difference.

If you want to be proactive about your insurance coverage, SoFi can help you compare your current auto insurance policy to what other top insurers are offering. SoFi will walk you through the process of getting the right coverage for your needs.

Check out SoFi Protect today to get real rates in real time for coverage you really need.

FAQ

How do insurance adjusters determine the value of a car?

An insurance adjuster will assign the car a value based on its pre-crash condition and what similar models are selling for. The “actual cash value” will factor in the car’s age, wear and tear, mileage, and other equipment you may have added, including the condition of the tires.

What happens if insurance doesn’t pay enough?

You can try to negotiate with the insurer to get a higher payout, but you should expect to back up your request with documentation. Or you may decide to hire a private appraiser to give you a second opinion of the car’s value.

What happens when your car is totaled and you still owe money?

If you’re still making payments on your car when it’s totaled, the insurance company will send the appropriate payoff amount to your lender and the rest of your settlement to you. If the insurance payment isn’t enough to cover what you owe, you may have to pay the difference.

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Photo credit: iStock/Jorge Villalba

Insurance not available in all states.
Gabi is a registered service mark of Gabi Personal Insurance Agency, Inc.
SoFi is compensated by Gabi for each customer who completes an application through the SoFi-Gabi partnership.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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Group term and voluntary term life insurance are both offered by employers and other organizations, providing convenient and low-cost baseline coverage. Depending on the employer, coverage may not be as comprehensive as some employees might require.

We’ll get into what group term life insurance is, how it’s different from voluntary term, and who should take advantage of these policies. You’ll also find out what portion of group term life insurance benefits is taxable and whether premiums are tax deductible.

Group Term Life Insurance, Defined

What is group term life insurance exactly? Term life insurance covers a policyholder for a set amount of time, hence the “term” part. (This roundup of life insurance terminology can be helpful for the uninitiated.) It pays a death benefit to beneficiaries — usually family members or other dependents — if the insured person dies within that time frame.

Group term life insurance is simply a policy offered to a group — often by an employer, trade union, or other organization — often at no cost to the employee. Group life insurance is sometimes referred to as employer-provided life insurance. If you’re new to the concept of life insurance, check out this guide to how life insurance works.

How Group Term Life Insurance Works

Group term life insurance coverage usually covers the timeframe of the member’s employment. (When it’s not purchased through an employer, terms range from 5 to 30 years.) All premium payments and death benefits tend to be fixed. If the policyholder lives past the end date on the policy, no benefit is paid and the premium payments are forfeited.

This type of policy is sometimes referred to as a “pure” life insurance product. That is, it has no cash value. Other types of life insurance do.

In group policies, many employers pay for baseline coverage for the employee, who pays nothing. Additional term life policies may be available at an affordable rate to cover a spouse, child (learn why life insurance for children might be necessary), or other dependent, with premiums deducted from payroll. Since an employer or similar entity is buying the coverage for many people at once, their savings are passed along to the members.

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What Group Term Life Insurance Typically Covers

Often, group policies pay out the equivalent of one year’s salary. Group term may cover fewer causes of death than other policies, but generally includes critical illness. Death by self-inflicted wounds may be excluded for the first 1 to 3 years of the policy.

Pros and Cons of Group Term Life Insurance

Group term life insurance has advantages and disadvantages.

Pros of Group Term Life Insurance:

•   Cost. Baseline policies are often free.

•   Availability. There’s usually no medical exam or other strict requirements.

•   Simple application. Often employees just check a box or sign a form.

•   Coverage when you need it. Families have some coverage in the event their main source of income is lost.

Cons of Group Term Life Insurance:

•   Low payout. Coverage is typically on the low side, equivalent to one year’s salary at most. Experts typically recommend that life insurance cover 10x your salary or more, depending on your financial obligations.

•   Lack of choice. A single policy is typically selected by your employer to cover all members, regardless of situation.

•   Non-portable. If you leave your job, you lose your coverage.

Recommended: What is Supplemental Life Insurance?

Requirements of Group Term Life Insurance

Requirements are minimal and usually involve being a permanent employee. You may need to be employed for a certain period of time (say, 90 days) before qualifying. There is typically no medical exam required. Individual workplace requirements can vary.

Voluntary Term Life Insurance, Defined

Similar to group term life insurance, voluntary policies are offered by an employer or membership group. However, voluntary policies are entirely optional (or voluntary) benefits the employee can purchase. Because your employer negotiates a group rate, it’s usually more affordable than purchasing online insurance yourself. If you’re curious about non-employer-based policies, this is a helpful look at how to buy life insurance.

As with group term, voluntary term life insurance has no cash value nor options for investing your premiums. (Whole life insurance does have cash value. Here’s a good comparison of term vs. whole life insurance.)

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How Voluntary Term Life Insurance Works

As with most life insurance, voluntary term pays out a lump sum to your beneficiaries if you die while the policy is in effect. Premiums are deducted from the policyholder’s paycheck.

Voluntary term life insurance coverage may be offered on an annual basis. The employee can choose to re-up, change, or cancel during their company’s open enrollment period. Rates go up over time, either annually or as the employee enters a new age bracket.

Recommended: How Long Do You Have to Have Life Insurance Before You Die

What Voluntary Term Life Insurance Typically Covers

Employees may select their amount of coverage, usually in multiples of their salary. The more coverage you select, the higher your premium will be. Limitations may be set as to the level of coverage you can choose or the availability of certain riders, compared to individual life insurance. Coverage varies by employer. But your voluntary policy should have the same coverage options and exclusions as your group term policy.

For lower coverage amounts, no medical information may be required. Higher coverage amounts often require a health questionnaire or medical exam.

Pros and Cons of Voluntary Life Insurance

As you might guess, the advantages and disadvantages of voluntary term insurance are similar to those of group term insurance. However, they’re not identical.

Pros of Voluntary Term Life Insurance:

•   Low cost. While not free, premiums are normally more affordable than for individual policies due to the employer’s group discount. You can learn about typical premium costs in this look at how much life insurance is.

•   No medical exam. No medical exam is required for less coverage. Older employees and those with health issues usually get a better deal through voluntary term plans than on their own.

•   Simplicity. Employees just need to select the level of coverage they want.

•   More-complete coverage. Because you can choose your level of coverage, payout benefits could cover loved ones completely in case of the policyholder’s death.

•   Portability. If you leave your job, you might be able to keep your coverage, but your premiums may rise significantly.

Cons of Voluntary Term Life Insurance:

•   Limitations. Employees are limited to a single insurance company. There may also be limits to the level of coverage and available policy riders.

•   Short-term solution. Employees who don’t plan on staying with their company long-term may be better served by an individual policy.

Recommended: Why Life Insurance is Important

Main Difference Between Voluntary and Group Term Life Insurance

Group term life insurance is typically free through your employer, while voluntary term is an optional benefit the employee can purchase at a reduced rate. Also, voluntary term insurance usually offers different levels of coverage, while group is provided at one level for all employees.

If you’re still not clear on the differences, this high-level introduction to what is life insurance may be useful.

Requirements for Voluntary Term Life Insurance

Like basic group insurance, requirements are minimal aside from a potential waiting period for new employees. There is typically no medical exam required. Individual workplace requirements can vary.

Is Group Term Life Insurance Taxable?

There are two components to group term life insurance that pertain to taxes: premiums and payouts.

Are Group Term Life Premiums Tax Deductible?

Life insurance premiums are usually not tax deductible. The IRS considers such premiums a “personal expense.” There may be exceptions for beneficiaries that are charitable organizations. (SoFi does not provide tax advice, please consult with a tax professional prior to making any decision.)

Are Group Term Life Payouts Taxable?

The first $50,000 of payouts from group term life insurance carried by an employer is excluded from taxes. After that, the benefit is counted as income and subject to income tax as well as social security and Medicare taxes.

The Takeaway

Term life insurance typically pays out a lump sum equal to a multiple of the policyholder’s salary upon their death. It has no cash value or investment options. Employers, unions and other organizations may offer group term life insurance as a free benefit. Employees may upgrade their coverage with voluntary term life insurance at a low cost, deducted from their paycheck.

Voluntary term policies can be valuable to older employees and those with health problems because premiums are low and a medical exam is usually not required. However, group policies can have limitations that make them less comprehensive than individual policies.

If you’re shopping for life insurance, SoFi has partnered with Ladder to offer competitive life insurance policies that are quick to set up and easy to understand. You can apply in just minutes and get an instant decision. As your circumstances change, you can easily change or cancel your policy with no fees and no hassles.

Complete an application and get your quote in just minutes.

FAQ

What are the disadvantages of group term insurance?

Coverage amounts tend to be much smaller than what experts recommend. You’ll need to use the insurance carrier chosen by your employer and, if you leave your job, you’ll lose the policy.

What happens to my group life insurance when I retire?

Retirees likely have the opportunity to continue paying for their life insurance. Before you retire, explore your options, comparing cost and benefits.

Is group term life insurance the same as life insurance?

Group term life insurance is one type of life insurance that pays out a lump sum upon the policyholder’s death. It has no cash value, unlike whole life policies, which are another type of life insurance.

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Photo credit: iStock/akinbostanci

Coverage and pricing is subject to eligibility and underwriting criteria.
Ladder Insurance Services, LLC (CA license # OK22568; AR license # 3000140372) distributes term life insurance products issued by multiple insurers- for further details see ladderlife.com. All insurance products are governed by the terms set forth in the applicable insurance policy. Each insurer has financial responsibility for its own products.
Ladder, SoFi and SoFi Agency are separate, independent entities and are not responsible for the financial condition, business, or legal obligations of the other, Social Finance. Inc. (SoFi) and Social Finance Life Insurance Agency, LLC (SoFi Agency) do not issue, underwrite insurance or pay claims under Ladder Life™ policies. SoFi is compensated by Ladder for each issued term life policy.
SoFi Agency and its affiliates do not guarantee the services of any insurance company.
All services from Ladder Insurance Services, LLC are their own. Once you reach Ladder, SoFi is not involved and has no control over the products or services involved. The Ladder service is limited to documents and does not provide legal advice. Individual circumstances are unique and using documents provided is not a substitute for obtaining legal advice.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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When something goes wrong with your car out on the road, most people have two options: Call an emergency towing service, or contact your roadside assistance program. Those two choices may sound like the same thing, but there are important differences.

Read on for a breakdown of what you can expect from each of these services, including pros and cons, and average costs.

Recommended: Does Auto Insurance Roadside Assistance Cover Keys Locked in a Car

What Is Roadside Assistance?

Roadside assistance comes to your aid when your car breaks down or some other mishap keeps you from using your car. If you find yourself stranded, roadside assistance will send help (a mechanic, locksmith, tow truck) to get your car back on the road, to a repair shop, or back home.

Roadside assistance packages vary from one provider to the next, but most include the following:

•   Flat tire change

•   Battery jump-starts

•   Fuel delivery

•   Lockout assistance

•   Winching/extrication

•   Quick-fix services

Any benefits you receive on top of these basics are determined by the roadside assistance plan you sign up for. For example, some plans include trip interruption coverage or a guaranteed arrest bond if you’re charged with a traffic violation. Plans may also offer savings on car maintenance costs, car rentals, hotels, and other perks. Extra benefits may come at an extra cost, however, so it’s important to compare plans carefully.

There are a few different ways you can get a roadside assistance plan, including:

•   Many insurance companies offer some type of roadside assistance coverage, usually as an add-on to your auto insurance policy. If you’re concerned about cost, there are other ways to lower car insurance premiums.

•   Another option is to pay for an auto club membership that’s separate from your car insurance.

•   Your car manufacturer may include a roadside assistance package as part of your warranty or as a limited free trial for a service you can later purchase.

•   Some credit card companies offer access to roadside assistance as a perk to cardholders.

Recommended: Why Personal Insurance Planning Is Important

What Can You Expect When Calling Roadside Assistance?

One of the benefits of participating in a roadside assistance program is that you’ll know exactly who to contact if you need help with your car. You can program the customer assistance number into your phone or download the program’s app, or you can tuck your membership card into your wallet or glove compartment.

Here’s what to expect when you call roadside assistance:

Recommended: How to Get Car Insurance

Calling for Help

First things first: If your child is locked in the car or you’re in a situation where you feel unsafe, you may want to make your first call to 911. The 911 dispatcher will determine whether to send an officer to help.

If you feel safe, you can go straight to calling roadside assistance. You may be asked to verify that you have an account or that the car is yours; so it can help to be ready with your license and registration, proof of insurance, and your roadside assistance plan’s membership card.

Your roadside assistance dispatcher will send the appropriate help from a network of service providers to your location. A technician may try to fix your car onsite, but if that isn’t possible, you can have your vehicle towed to a repair shop or your home, if that’s your choice and it’s within your plan’s mileage limit.

Getting Home

If your car needs to be towed to a repair shop, you probably will be able to ride with the tow truck driver. Once you’re finished there, it’s up to the tow truck driver (or company policy) if you can get a ride home. During busy times, you may be responsible for getting home on your own.

If you’re out of town when your car breaks down, roadside assistance coverage will sometimes pay for an overnight stay in a hotel. (If you travel a lot, you may want to see if this benefit is available when you’re comparing plans.)

Wait Times

Many roadside assistance programs work with a network of providers, so when you call, there may be someone nearby who can get to you quickly and offer the services you need. Generally, you can expect help to arrive in less than an hour.

Several factors can impact your wait time, however. If there’s heavy rain, wind, or a snowstorm, for example, you may have a longer wait. It can also take a while to get help if you’re in a rural location that’s far from a locksmith, mechanic, or towing service — or if you’re in a busy city at rush hour.

Some plans provide updates through texts or an app, so callers can track their current wait time.

Payment

How the service provider who comes to your aid is paid depends on the plan you’re enrolled in. With some programs, if you use the toll-free number or an app, and the dispatcher sends a technician to help, you may not have to pay anything upfront for covered services. But if you contact a tow service, mechanic, or locksmith directly, you will likely pay out of pocket, then submit receipts to your plan for reimbursement.

Some plans don’t have a central dispatcher. In that case, you’d call a provider directly, pay for the services, and then file a reimbursement claim. No matter how your plan handles payments, it’s a good idea to keep a credit card on you when driving.

There is no deductible for roadside assistance. Most programs have very specific limits on what they will cover. For example, if a service technician delivers fuel to your car because you’ve run out of gas, the delivery may be free, but you may have to pay for the gas.

Recommended: How to Lower Car Insurance

What Is the Average Cost of Roadside Assistance?

The price of a roadside assistance plan varies based on several factors:

•   how many vehicles or drivers you want to cover

•   where you live

•   whether coverage is through your auto insurance or another source

•   the level of coverage you choose

Some plans charge less for annual coverage and more for services received, and vice-versa. It can be useful to compare online insurance benefits and quotes to get a sense of what’s available and at what cost.

Generally, you’ll pay less for a plan that’s an add-on to your auto policy versus a stand-alone membership. Allstate, for example, offers a roadside assistance insurance add-on for as little as $25 per year for one vehicle. Without an Allstate policy, the cost of a roadside assistance membership starts at $79 for the first year.

If your insurer doesn’t offer 24-hour roadside assistance, or you don’t like your insurer’s plan, you may want to check out what other insurance companies are offering.

Recommended: How Much Does Insurance Go Up After an Accident?

Pros and Cons of Roadside Assistance

One of the biggest pros of roadside assistance coverage is that you know you’ll have someone to contact any time you’re in need. You can call for advice or hands-on assistance, and someone will be there to help.

As noted above, some plans will post a bond if you’re charged with a traffic violation or reimburse you (within limits) if you need to stay in a hotel overnight. Plans may also include benefits that go beyond roadside breakdowns, such as discounts on travel and entertainment.

If you have to call roadside assistance even once, you may save enough on the services rendered to cover your cost for the year.

Still, no one likes the idea of paying for something they may never use. If you have a newish car that’s well-maintained or you seldom drive far from home, you may decide roadside assistance isn’t for you.

Coverage limits can also be disappointing. Enrolling in a roadside assistance plan doesn’t mean you’ve got a blank check that will cover any cost you incur. You may have to pay something for a tow if you go beyond the mileage limit, for example, or you may have to pay for a new battery or tire if yours needs replacing. There also may be an annual limit on the number of calls for service you can make.

Also, not all costs are covered upfront. Your plan may require you to submit receipts for reimbursement in some or all instances. If you’re averse to paperwork, that may be something to consider.

What Is an Emergency Towing Service?

The main purpose of emergency towing services is to move a vehicle when the driver can’t get back on the road without help. There are several circumstances that might require calling for an emergency tow, including:

•   When you’re in an accident, and either your car can’t be driven or you’re in no shape to drive

•   If your car isn’t running and it’s blocking traffic or putting you and other drivers in danger

•   If you’re pulled over by law enforcement and the officer determines you can’t drive

There are a couple of circumstances in which your car insurance may pay for a tow, even if you don’t have roadside assistance coverage:

•   After an accident and you have collision coverage

•   If your car is damaged — in a flood, fire, etc. — and you have comprehensive coverage

But in most cases, if you don’t have roadside assistance or “towing and labor” coverage through your auto insurance policy, an auto club membership, or a car warranty, you may be on your own when it comes to paying for your vehicle to be towed away.

What Can You Expect When Calling an Emergency Towing Service?

If your car breaks down close to home, you may be able to directly call a reliable repair shop or towing service you’ve worked with in the past. Having that connection can be a benefit if you want to choose the company that will come to your aid quickly.

But if you’re far from home and unfamiliar with the service providers available, you may have to cross your fingers and hope for the best when you call for a tow.

Here’s what you can expect when you call for emergency towing without a roadside assistance plan:

Calling for Help

If your regular mechanic or garage has the right equipment for your needs (a tow truck, a flatbed truck, a winch, etc.), you may be good to go. They can come pick up your car and get you the help you need.

But if you can’t call your favorite repair shop — because you’re out of town or it’s after hours — you may have to make a few calls before you find the appropriate help.

Some companies don’t require a subscription to use their towing and roadside assistance network, so you can try contacting them for help. But if their network doesn’t include services where you are, you may have to try your luck dialing local tow truck companies.

When a tow truck comes to your location, the driver may be able to offer onsite assistance with a flat tire, dead battery, or other problem — but you can’t necessarily count on getting the same help you’d get with a roadside assistance plan. The driver may be equipped only to tow your car back to your house or to a repair shop. And you can expect to pay in full for every service you receive if you don’t have roadside assistance coverage.

No matter who you call, it’s important to be clear about what you need. And of course, if you’re in an accident or feel as though you’re in danger, you should call 911 first.

Getting Home

You may be able to get a ride home from the tow truck driver after they take your car to the garage. But just as with a roadside assistance plan, it will likely be up to the individual driver’s discretion or company rules. If you aren’t sure if there will be a cost for the ride, you may want to ask before you get in the truck. And if you’re far from home, you also may want to ask for hotel recommendations.

Wait Times

Response times for tow trucks generally are determined by availability. If you call a tow company directly and there’s a truck close to your location, you may be able to get faster service than you would calling a roadside assistance plan because you’re eliminating the middleman.

But the same things that can hold up a truck coming through a roadside assistance dispatcher can slow down a company you call directly, including inclement weather, rush hour traffic, and distance.

Payment

If you call a tow truck directly, you can expect to pay the bill out of pocket. Depending on why you’re calling and the type of insurance coverage you have, you might be reimbursed for some costs. But if you’re calling about an overheated engine, dead battery, or flat tire, and you don’t have roadside assistance coverage, your insurance company typically won’t reimburse you for your costs.

What Is the Average Cost of Emergency Towing Services?

According to J.D. Power, towing rates in the U.S. can range between $2.50 and $7 per mile, and the average cost of a tow is about $109. But besides distance, several factors can affect the overall cost of a tow.

It may cost less to have your car towed after a breakdown than if you’ve been in an accident. And if the tow company needs to use special equipment — because your car is stuck in mud, snow, or a deep ditch, for example — that can also increase the price.

Many tow companies also include a base charge or “hook-up” fee that can range from $35 to $100. Some tow companies have a list of basic charges on their website, but if you can’t find pricing, you may want to ask so there aren’t any surprises.

Pros and Cons of Emergency Towing Services

One of the biggest upsides to using emergency towing service may be that you’re eliminating the middleman. You don’t have to wait for the dispatcher to find a network-approved provider to come and get you; you can call any company you like.

Of course, this can also be a drawback if you’re far from your favorite mechanic or repair shop. You may have to make multiple calls to find a tow truck that can come to your rescue.

Another plus to consider is that you won’t have to worry about paying for roadside assistance coverage every year whether you use it or not. You’ll only pay for services you actually use.

But if you do end up calling a tow truck even once and you don’t have coverage, it can mean a whack to the wallet. You can end up paying more for that one tow than you would for a year of roadside assistance coverage — and you won’t be getting the perks.

How To Decide Between Roadside Assistance and Emergency Towing Services

Because there are pros and cons to both roadside assistance coverage and emergency towing services, here are some things you may want to look at when you’re trying to decide between the two:

Your Comfort Level

Are you someone who likes having a plan when things go wrong, or are you OK with winging it? If you like the security of knowing you’ll have just one call to make if you need help on the road, you may prefer roadside assistance coverage.

Your Car

If your car is new or it’s well-maintained and the chances of a breakdown are slim, you may decide you don’t need to pay for roadside assistance coverage.

The cost of some roadside fixes may be covered if your car is still under warranty. And if you have collision or comprehensive coverage through your auto insurance policy, towing costs may be paid in some circumstances.

Your Family’s Needs

Maybe your car is an older model that isn’t exactly reliable. Or maybe you have some first-time drivers in the family, and you want to feel confident they’ll know who to call (besides you) if they run into trouble on the road. You might want to look into what it would take to get new drivers roadside assistance coverage for the whole family.

Value

You may want to list side-by-side the costs of having a roadside assistance plan versus what you might end up paying for a tow or other services out of pocket. Can you afford a plan that fits your needs and budget? Can you afford to not have coverage? (Keep in mind that if you use your plan just once, it may pay for itself for the year.)

Recommended: Auto Insurance Terms, Explained

The Takeaway

When the unexpected happens on the road, you can wing it and call for a tow truck. Or you can contact roadside assistance and feel confident that someone will come help you out ASAP. And some or all of the cost of getting your car back on the road could be covered under your plan. Many drivers consider roadside assistance a good deal for the money: The cost of just one tow is often more than the annual cost of roadside assistance. If you travel a lot, or have young children or new drivers in the family, roadside assistance may be what you need.

If roadside assistance sounds like something you could use, SoFi can make it easy and convenient to find the best auto insurance policy with the right benefits for your needs. SoFi can help you compare auto insurance policies today.

FAQ

What is emergency roadside assistance good for?

Roadside assistance coverage can help you deal with and pay for a range of unexpected costs you might run into while on the road — from fixing a flat tire onsite to towing you to a repair shop for major repairs.

Is emergency roadside assistance worth it?

No one likes paying for something they may never use. But if your car breaks down just once, the convenience and savings you get through your roadside assistance plan may make it worth paying the annual cost.

What is the difference between emergency towing and roadside assistance?

Roadside assistance coverage is meant to help you get the service you need when you have car trouble — on the road or at a repair shop. Depending on the problem, roadside assistance may cover all or a portion of the costs. On the other hand, emergency towing is meant to get your car off the road and to a repair shop where it can be fixed. Generally, you can expect to pay for all the costs related to this service.

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Photo credit: iStock/sefa ozel

Insurance not available in all states.
Gabi is a registered service mark of Gabi Personal Insurance Agency, Inc.
SoFi is compensated by Gabi for each customer who completes an application through the SoFi-Gabi partnership.
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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Think of 24-hour roadside assistance coverage for your truck or car like having another tool in your emergency kit. Roadside assistance can provide the services you need to get you back behind the wheel ASAP. Services include changing flat tires, fuel delivery, jump-starts, and lockout assistance. The national average cost for roadside assistance when added on to an auto insurance policy is $20/year.

Before you sign up for roadside assistance, it can be useful to know some basics. In this guide, we’ll look at what you can expect when you enroll in a roadside assistance program.

Recommended: Does Auto Insurance Roadside Assistance Cover Keys Locked in a Car

What Is 24-Hour Roadside Assistance?

Roadside assistance plans cover a range of problems that commonly affect motorists. Whether you’re stuck on a busy highway or a lonely roadside, in a mall parking lot or your own driveway, you can ask for help with a dead battery, flat tire, being locked out, and more. These programs not only cover cars and trucks but also motorcycles, RVs, and boat trailers.

Since problems can happen at any time, roadside assistance programs make their services available around the clock. There is no deductible for service calls. Depending on your plan, any costs you incur in an emergency may even be reimbursed.

Recommended: Ways to Save on Car Maintenance

What Are Some Benefits of 24-Hour Roadside Assistance?

Roadside assistance is designed to cover all drivers, but it can be especially useful for parents of young children, first-time drivers, and people with physical limitations. Probably the top benefit of having 24-hour roadside assistance coverage is that there’s a number to call any time you’re in need. You can keep that number programmed in your phone or put it in your wallet or glove compartment — or your provider may offer an app.

You can call for advice or hands-on assistance, and someone will help you get what you need. Some plans may even post bond if you’re charged with a traffic violation, or reimburse you if you need to stay in a hotel overnight because your car broke down. Some plans include other benefits, such as travel discounts and rewards points.

Recommended: How to Get Car Insurance

What Does 24-Hour Roadside Assistance Cover?

Assistance programs vary significantly depending on the service provider, the coverage level, and what you’re willing to pay. So when you’re comparing roadside assistance for cars and trucks, it’s important to understand the details of what each plan covers. Roadside assistance is not intended for use after an accident. In that case, 911 will arrange for help to arrive.

Most companies that offer roadside assistance programs set limits on what they will and won’t pay for. A provider may offer to deliver fuel to your vehicle for free, for example, but you can expect to be charged for the gas you receive. Similarly, roadside assistance may offer free lockout assistance, but there may be a charge if you need to have a new key made. If your car needs a tow, there may be a limit on how many miles you can go for free. There may also be a limit on how many service calls you can make in a year.

Plans have different rules on whether a particular driver or vehicle qualifies for a service call. With some plans, you must be driving your own car when you call for assistance. Other plans will cover you even if you’re the passenger or driver in someone else’s car.

Programs generally include some type of coverage for:

Vehicle Towing

If your vehicle can’t be safely repaired or restarted onsite, roadside assistance can tow it to a nearby repair shop.

Battery Jump-Start or Replacement

Roadside assistance can give your dead battery a jump and, if that doesn’t work, install a new battery onsite or give you a tow.

Changing a Flat Tire

If you have a usable spare tire, your service provider likely can change a flat or blown-out tire onsite. If not, they can tow you somewhere for help.

Lockout Assistance

If you’ve locked your keys in your car, roadside assistance can get a locksmith to help. Even if you’ve lost your keys, the service may be able to get you back in your vehicle and back on the road.

Winching Service

Stuck in snow, mud, sand, or water? Your service provider may bring in a winch to extricate your car or truck.

Fuel Delivery

If you run out of gas, your provider can deliver fuel to your location. And if the battery in your electric car needs a charge, you can ask for a tow to the nearest charging station.

Quick Fix First-Aid

If you have a minor mechanical problem that can be fixed quickly, it may be possible to do so onsite. If not, the service can tow your car to a nearby repair shop.

Recommended: 10 Tips for the Cheapest Way to Rent a Car

What Are Some Ways Drivers Can Get 24-Hour Roadside Protection?

There are few different ways you can get roadside assistance coverage for yourself and your family members. For individuals who set aside time for personal insurance planning, consider adding roadside assistance to your list.

Auto Club Membership

Probably the best-known way to get 24-hour roadside assistance is through an auto club like AAA (pronounced “triple A”). The company will issue you a membership card with numbers to call for service. You may also be able to download an app or send a text to get service.

Plans range from $50 to $160 per year. Your price will depend on how many family members are covered, your location, and the services you’ve selected.

Credit Card Company Benefits

You may be able to access roadside assistance through one of your credit cards. Again, the cost for your overall coverage or a specific service will vary depending on the plan. For example, one credit card provides the service for free to its members but charges $69.95 for a standard service call, including 5 miles of towing.

Vehicle Manufacturer

Some car and truck manufacturers also offer roadside assistance as a perk for new car buyers. Your vehicle may come with protection that lasts for a few years or the length of your limited warranty, or it may be available for only a few months as a free trial for a service you can later purchase. Your sales agreement should provide the details on what your plan covers, or you can ask the dealership.

Car Insurance Company

Many car insurance companies make some type of roadside assistance coverage available to their customers. Some plans provide only the basics, while others may offer two or three different levels of coverage. Costs range from $2 to $5 a month, or $15 to $60 a year.

When you’re considering cost, keep in mind that you may be able to lower your car insurance cost by bundling it with other types of insurance coverage.

Recommended: How Much Does Insurance Go Up After an Accident?

Which Insurance Companies Offer 24-Hour Roadside Assistance?

Insurance companies that provide 24-hour roadside assistance typically offer the service as an add-on to an auto policy. However, in some instances you may be able to access a roadside protection membership without being a policyholder.

If you aren’t sure if you already have roadside protection, contact your agent or log in to your account on your insurer’s website to get information about your coverage. You may also view benefits via online insurance comparison sites. The information also may appear on your insurance card.

Here are a few companies that offer roadside assistance:

Allstate

Allstate offers its 24-hour roadside assistance programs to both policyholders and non-policyholders. Costs and limitations will vary based on the plan you choose.

Geico

Geico’s roadside assistance program is available to policyholders as an add-on, and it covers most of the basics other plans offer. The cost is determined by the number of vehicles you want to cover.

Liberty Mutual

To access Liberty Mutual’s 24-hour assistance program, which offers basic roadside services, you must purchase optional towing and labor coverage as an add-on to your policy.

Nationwide

Nationwide offers roadside assistance as an optional add-on for policyholders. The plan covers the same basic services offered by other insurers, but optional features and program details vary by state.

Progressive

Emergency roadside assistance is available as an optional add-on for Progressive auto insurance policyholders. Progressive’s program covers service basics such as towing, jump-starts, lockout assistance, etc.

State Farm

State Farm’s roadside assistance program is an add-on for policyholders. If you have this coverage and need assistance, State Farm will be billed directly for any basic services you receive, so you won’t have to worry about waiting to be reimbursed.

(The above coverages are accurate as of the writing of this article but may differ in the future.)

What Is the Average Cost of 24-Hour Roadside Assistance for Cars?

When added to your car insurance policy, roadside assistance coverage costs an average of $20 per year. The price of a roadside assistance plan can vary based on how many vehicles you want to cover, where you live, whether your coverage is through your auto insurance or some other source, and the level of coverage you choose.

Some plans charge less for coverage and more for services, and vice-versa. It’s a good idea to compare several different plans and choose the one that works best for your individual needs and budget.

Recommended: How to Lower Car Insurance

What Is the Average Cost of 24-Hour Roadside Assistance for Trucks?

The cost of roadside assistance for a pickup truck is similar to the cost for a car. If you have an RV or another large vehicle, however, you’ll need to check out a plan tailored for the problems you might encounter.

How Much Does 24-Hour Roadside Assistance Cost Without Insurance?

The national average cost of a tow without roadside assistance coverage is $109, or between $2.50 and $7 per mile.

What Makes 24-Hour Roadside Assistance Different from Other Coverage?

Standard car insurance is designed to protect car owners against financial losses when they’re in an accident, or if their car is damaged, stolen, or vandalized. But a standard auto policy doesn’t typically include roadside assistance for something like a flat tire or running out of gas. That’s a different kind of coverage, and it usually costs extra to add it to a car insurance policy.

Another difference: In most states, you are required to carry minimum required car insurance. You aren’t required to carry roadside assistance coverage. It’s your choice.

How Do You Choose a 24-Hour Roadside Assistance Program?

There are a few points you should consider when you’re shopping for a roadside assistance program:

Do You Already Have Protection?

If you aren’t sure, check your car warranty, credit cards, and your car insurance policy. Even if you are covered, it can be a good idea to compare your coverage to what’s available to make sure you have everything you need.

What Are the Coverage Limits?

Read the fine print for details and coverage limits before you sign up for a plan. Be sure you’re getting the services you expect and want most.

What Will It Cost?

Plans are generally low-cost, ranging from $20 to $150 per year. Compare the costs of different plans and determine which works best with your budget.

Does the Provider Get Good Reviews?

Don’t forget to check the provider’s reputation. Reliability is important when you’re stuck on the side of the road waiting for a tow or jump-start. An important part of researching different plans includes reading customer reviews.

The Takeaway

A 24-hour roadside assistance plan provides drivers with whatever help they need to get back on the road as soon as possible. Drivers typically get roadside assistance through their auto insurance, but you can also find it via credit card benefits, car manufacturers, and auto clubs like AAA. Prices vary from $20/year as an auto insurance add-on, to $50-$150/year through an auto club. Considering that the cost of a single tow without coverage can be over $100, many people say the cost of roadside assistance is well worth it.

If you’d like to check out roadside assistance options, you can start by going online to compare your current auto insurance plan and benefits with other major companies. SoFi makes comparing auto insurance policies and rates quick and convenient, so you can get the coverage you need at a price that feels right.

Wondering if you have the car insurance coverage you need? Get started with SoFi Protect today.

FAQ

Does using roadside assistance increase your premium?

If you make only one or two claims a year, utilizing roadside assistance is unlikely to affect your insurance premium. But if you make more than 4-5 roadside assistance claims in a year, your insurance company may want an explanation.

What does roadside assistance cover?

Every plan is different, but most include basic coverage for lockout assistance, changing a flat tire, jump-starting a battery, fuel delivery, using a winch to extract a stuck vehicle, minor engine fixes, and towing.

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Photo credit: iStock/nopponpat

Insurance not available in all states.
Gabi is a registered service mark of Gabi Personal Insurance Agency, Inc.
SoFi is compensated by Gabi for each customer who completes an application through the SoFi-Gabi partnership.
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