Tire Insurance Myths And Facts About Road Hazard Policies

Tire Insurance Myths And Facts About Road Hazard Policies

Insurance—it’s everywhere. One can insure just about anything. Are tires an​ investment one needs to​ insure? Tire insurance,​ also called a​ road hazard policy,​ road hazard warranty,​ or​ tire reimbursement plan,​ is​ a​ rapidly growing industry in​ the​ automotive world.

Tire warranty plans pay in​ full or​ in​ part for the​ replacement or​ repair of​ damaged tires and/or rims from “road hazards.” Road hazards are defined as​ pot holes,​ debris,​ nails,​ wood,​ and other hazards found in​ the​ road. Curbs,​ sidewalks,​ and stone walls are not road hazards. This is​ an​ important distinction to​ consider when deciding if​ tire insurance is​ right for you​ (discussed further ahead).

Tire plans last for a​ specific period of​ time and tire wear tread-depth. Some plans last 2-3 years. Others can last 5 years or​ 60,​000 miles. Several plans come with fixed amounts of​ coverage: $500 per year up to​ 4 years. Many contracts require three years of​ law school to​ comprehend. in​ terms of​ tread depth,​ a​ tire is​ usually considered worn out (and thus the​ plan null and void) at​ 2/32 to​ 3/32 of​ an​ inch.

Another important distinction is​ in​ the​ type of​ plan.

Tire reimbursement plans are just what they say. You,​ the​ plan holder,​ will be reimbursed after the​ claims process is​ finalized—usually 2-8 weeks. There is​ an​ out-of-pocket expense. These plans are often sold by new car dealerships. the​ prices can range from $300 to​ $600 dollars.

Road hazard policies operate similarly to​ reimbursement plans. However,​ some tire insurance providers,​ in​ partnership with the​ repair facility,​ may have a​ direct-pay relationship. Thus,​ there would be no out-of-pocket expense,​ except for applicable deductibles,​ and items not covered in​ part or​ in​ full. These plans are primarily sold by tire dealers and repairshops. the​ prices range from $10 to​ $30 per tire. They also can be based on​ a​ percentage of​ the​ cost of​ the​ tire: usually 12% to​ 15%.

Both types of​ plans have a​ number of​ variables,​ requiring a​ magnifying glass to​ read the​ fine print. Also,​ many are pro-rated warranties,​ covering only a​ percentage of​ the​ cost of​ the​ tire based on​ its wear.

Claims and Coverage:
Depending on​ the​ plan,​ claims are initiated by the​ repair shop. the​ process is​ fairly smooth,​ although there can be a​ significant delay from the​ provider for authorization. This delay may be an​ hour or​ an​ entire weekend. This means that you’ll have to​ “ok” the​ tire replacement,​ and then hope it’s authorized for the​ full amount,​ or​ drive on​ your spare.

Some plans offer national coverage either among their service facilities or​ from other repair centers. Claims procedures will vary. Others only provide local coverage,​ or​ coverage at​ the​ selling facility.

Tire insurance does not mean that everything is​ covered. Pro-rated warranties are based on​ the​ wear and tear of​ the​ tire. you​ may get 75%,​ 50%,​ or​ only 10% coverage depending on​ the​ tread-depth. You’ll pay the​ remainder. While there are plans that offer full coverage,​ even these have limitations,​ or​ they may conflict with a​ repair shop’s policies.

For example,​ many plans allow for a​ maximum of​ $30 to​ mount and balance one tire,​ and a​ maximum of​ $15 to​ repair a​ tire. However,​ sport tires often have significantly higher mounting and balancing fees—upwards of​ $50 per tire—and tire repair prices can exceed $90. There are also discrepancies on​ the​ tire and rim prices themselves,​ which in​ the​ end,​ may have to​ be supplemented by the​ service customer.

Although there usually is​ not an​ issue with the​ latter given the​ competitive market,​ the​ service center’s price mark up may be unacceptable to​ the​ plan provider. in​ this case,​ the​ service center needs to​ lower the​ price or​ you,​ the​ service customer,​ need to​ pay the​ difference—or go somewhere else. This does happen!

Rim Prices and Repairs:
Rim replacement is​ becoming less frequent. With the​ high cost of​ aluminum wheels and sport wheel packages,​ tire insurers have opted to​ have them repaired. Repair will only be done if​ the​ rim does not hold air. What this means is​ that even if​ the​ rim is​ warped—enough to​ cause a​ vibration and even premature tire wear—they won’t replace it. Rather,​ they will send it​ out to​ be straightened and repaired.

Rims are replaced only if​ the​ damage is​ so extensive that the​ new tire,​ when mounted on​ the​ rim,​ won’t hold air. However,​ even in​ this case,​ especially if​ it’s an​ expensive sport wheel,​ they may still attempt to​ repair it.

Repairing rims is​ a​ bad option. While some rim repair is​ acceptable,​ badly warped or​ damaged rims will in​ no way ever be the​ same.

If a​ car hits a​ road hazard hard enough,​ such as​ a​ pot hole,​ it’s wise to​ have the​ alignment checked. Road hazard policies and tire reimbursement plans do not cover alignments. the​ service customer will have to​ pay for this procedure.

Road Hazard Protection Positives:
Some plans include tire rotations,​ wheel balancing,​ and nationwide coverage.


1) "Can I pop all 4 tires and get a​ new set of​ tires?"

You can try. But this type of​ claim will trigger a​ number of​ red flags with the​ insurer. the​ policy holder will likely send out adjusters and/or require photographs. you​ will also have a​ difficult time explaining how a​ “road hazard” caused all 4 tire pop.

2) "New tires come with a​ road hazard warranty."

New tires do come with a​ warranty by the​ tire manufacturer. However,​ it​ only covers defects in​ workmanship. New tire warranties do not cover punctures or​ damages from external sources. This is​ why "road hazard" protection is​ being pushed.

New tires are rarely defective. if​ there is​ a​ problem,​ it’s usually noticed when balancing the​ tire. Or,​ there is​ a​ drivability concern such as​ vibration or​ noise. if​ there’s a​ defect it’s generally caught right away,​ and the​ tire swapped out.

3) "It’s so cheap; it’s a​ no-brainer,​ right?"

Actually,​ the​ experts don't agree with this statement.

The Economics of​ Tire Warranties:
An article from the​ Washington Post by Terence O’Hara explains the​ economics of​ extended warranties and purchase protection plans in​ general. it​ is​ quite fitting for road hazard warranties. He writes:

"The decision to​ buy an​ extended warranty…defies the​ recommendations of​ economists,​ consumer advocates and product quality experts,​ who all warn that the​ plans rarely benefit consumers and are nearly always a​ waste of​ money.

‘[Extended warranties or​ purchase protection plans] make no rational sense,​’ Harvard economist David Cutler said. ‘The implied probability [of having an​ issue with the​ product] has to​ be substantially greater than the​ risk that you​ can’t afford to​ fix it​ or​ replace it. if​ you’re buying a​ $400 item,​ for the​ overwhelming number of​ consumers that level of​ spending is​ not a​ risk you​ need to​ insure under any circumstances.’"

In short,​ road hazard warranties are a​ waste of​ money. Don’t insure that which you​ can afford to​ replace.

Numbers Game and Slim Chances:
Like all insurance,​ tire insurance plans are a​ numbers game. However,​ this is​ a​ game you​ have a​ 98% chance of​ losing. Insider statistics show that the​ percentage of​ claims paid out by providers is​ as​ low a​ 2%.

Another interesting note is​ that a​ lot of​ tire damage is​ caused by curbs. Curb damage is​ not covered under most road hazard policies. High granite curbs with sharp edges slice through tens of​ thousands of​ tires per year.

You Won’t Notice:
Many people don’t even notice tire damage. Other than to​ see if​ the​ tires are holding air,​ who “really” looks at​ tires? Tires are subject to​ a​ whole host of​ external influences which cause bubbles,​ slices and gouges.

Despite the​ potential dangers of​ damaged tires,​ the​ damage very often does not translate into any noticeable drivability issue. the​ point is​ that if​ you​ don’t notice any tire damage you​ can’t benefit from the​ coverage.

Research Shows:
Those raving about the​ benefits of​ a​ road hazard policy are the​ actual folks in​ the​ industry who stand to​ benefit from the​ sale. They’ll argue that it’s so cheap—only $10 to​ $20 per tire. Even so,​ for four tires,​ that’s $80 based on​ the​ “possibility,​” the​ “chance,​” of​ damaging a​ tire that meets the​ repair/replacement requirement protocols.

Auto Insurance:
If a​ rim and tire has incurred significant damage,​ it’s quite likely that other problems have resulted as​ well. the​ first is​ that the​ vehicle may have been jarred out of​ alignment. Secondly,​ hub bearings,​ front end components: tie rods,​ spindles,​ ball joints,​ and a​ variety of​ other components may have sustained damage. in​ this case,​ auto insurance,​ which you​ are already paying for,​ will pay for everything—brand new.

Free Road Hazard Warranties:
Many tires come with road hazard warranties FREE. in​ other words,​ in​ an​ effort to​ secure retailers,​ many tire distributors provide service centers FREE road hazard insurance. Some shops pass this on​ to​ their tire customers,​ others sell them. Ask if​ the​ tire “comes” with a​ road hazard protection policy. if​ not,​ request that one be provided at​ no additional charge. It’s worth a​ shot.

Also,​ some car manufacturers provide road hazard warranties FREE of​ charge for 12 months or​ 12,​000 miles. if​ you’re buying a​ new car or​ even used,​ ask that the​ dealer provide a​ complimentary road hazard policy (after all the​ wheeling and dealing is​ done,​ of​ course),​ and just before you​ commit.

"What’s the​ best road hazard policy?"
Money in​ "your" bank account.

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