Will Tow Insurance Cost You in the Long Run?

It may seem like a wise, cost- saving move: adding roadside assistance coverage to your auto insurance policy. But a few flat tires or jump-starts could end up costing you in the end.

For as little as three to twelve dollars per six month policy period, your auto insurer will  reimburse you  or provide towing, jump- starts, tire changes, and lock out services.

The fee is considerably lower than the $50 or more that motorists pay for a motor club annual membership. But the savings may come with a catch.

Auto insurers may raise your rates, refuse coverage or drop your policy based on what they consider to be excessive road service claims.

Most auto insurers not only track roadside service claims, they in fact, report them to a national database run by ChoicePoint, a subsidiary of LexisNexis (Stock Quote: ENL).

The company through its Comprehensive Loss Underwriting Exchange (C.LU.E.) tracks tens of millions of auto accident claims, speeding tickets, and yes even flat tires, towing and various other road service claims reported by auto insurers.

‘’By providing immediate interactive information, C. L. U. E. Personal Auto helps insurers and agents make immediate business decisions,” says Fiona McCaul, the manager of media relations for LexisNexis. McCaul says the information is kept on the report for 7 years.

Every motorist has a C.L.U.E. report. Auto insurers can access the reports when deciding to offer new coverage or at renewal time.  The upshot of this is that road service claims can affect you negatively.

‘’I am surprised and shocked that auto insurers would penalize motorists for road service claims,” said Paul Stevens, director of Policy and Advocacy for the nonprofit Privacy Rights Project. ‘’What’s the nexus between getting a few flat tires and not being a good driver.’’
Actually, a lot, maintain auto insurers.