Many auto insurers provide roadside assistance coverage. They may market it as an add-on to your policy for just a few dollars a year.
But it can damage your bottom line to the tune of much, much more than its cost according to money expert Clark Howard. He calls this coverage “a cynical attempt of the auto industry to cheat its policyholders.”
“A number of auto insurers will offer you very, very low-cost roadside assistance in competition with AAA and other third parties,” Clark says. “And they do it as a trick, because many of the insurers will treat a towing as an at-fault claim.”
That claim will likely get recorded on your C.L.U.E. report, and that’s not a good thing. A C.L.U.E. (Comprehensive Loss Underwriting Exchange) report contains seven years’ worth of information about you and any insurance claims you’ve made over that period. Insurance companies use them to help determine your rates.
“When you try to go to shop with someone else for auto insurance, you’ve got that poison pen letter right there that destroys your ability to get good premiums,” he says.
Clark adds that there may be auto insurers here and there that don’t treat roadside assistance as an at-fault claim, but he doesn’t want you to take the chance.
The good news is that there are plenty of other places to get roadside assistance coverage.
There are several credit cards that offer roadside assistance as an option. My Amazon Chase Rewards card is one of them (they may charge a fee for this service). Read more about this card here.
Here are some other credit cards that offer roadside assistance:
Be mindful that some of these cards may come with introductory or annual fees.
Although the motor club offers many benefits, AAA is perhaps best known for its roadside assistance. I’ve been a member for some years now.
An annual membership can cost as little as $37, but it depends on where you live.
Read this before you sign up for AAA.
Some cell phone companies offer roadside assistance as an add-on subscription alongside your phone plan.
T-Mobile offers it through a partnership with Allstate Motor Club. You’ll need to download the T-Mobile SyncUp Drive app (Android | iOS) to use roadside assistance, which covers four tows a year up to $100 each. Additionally, you need to connect the SyncUp Drive device, with a data plan that starts at $10 a month, to your vehicle.
For $4.99 a month, Verizon covers roadside assistance. All customers are eligible.
Clark says to protect your wallet from higher rates, don’t get roadside assistance from your auto insurer — with one exception:
“Never get roadside assistance from your auto insurer unless they say in writing that use of that rider will not count against you or be treated as a claim or reported as an at-fault claim.”