Owning an older vehicle can have its advantages, from nostalgic value to potential cost savings if you own the vehicle outright. You may also be able to make money-saving adjustments to the car insurance coverage on your trusty old ride.
There are multiple ways to adjust coverage on an old car: You may choose to lower your limits, increase your deductibles or even drop certain coverages altogether. It helps to know what car insurance coverages are required by law (or by your lender) — and what each helps protect — before you make adjustments to your policy. Here are some things to consider if you have an older car.
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WHAT’S THE DIFFERENCE BETWEEN INSURANCE FOR AN OLDER CAR AND CLASSIC CAR INSURANCE?
Coverage limits (and how they are determined) is one way classic car insurance differs from traditional car insurance for an older vehicle.
A standard car insurance policy may include comprehensive coverage or collision coverage with limits based on the car’s depreciated value (its «actual cash value»). So, if your car is totaled in a covered collision, the maximum amount your insurer would pay you to help replace it is the car’s depreciated value.
A classic car insurance policy, on the other hand, may have coverage limits based on the car’s «agreed value.» The agreed value may be based on the car’s condition, special-order parts, improvements and the cost to replace the car. (In other words, the coverage limits isn’t based simply on the car’s age and mileage.)
DO OLDER CARS COST MORE TO INSURE?
Your rates for comprehensive coverage or collision coverage on an older vehicle may be lower than what you’d pay for those same coverages on a newer car that’s worth more. That’s because you’d have less coverage (lower «coverage limits») on an older car. Older cars are typically worth less, as their value depreciates over time.
You may also be able to drop comprehensive coverage or collision coverage from your policy if your car is paid off. If you drop coverage and your older car is damaged in an accident, however, your policy won’t pay for the damage.
Even without comprehensive or collision coverage, you’ll need to pay for other coverages on your older car, such as liability, that are required by state law. Additionally, your insurance premium depends on a number of factors, including the type of car you drive, your driving record, where the car is kept and more. So, the total premium you’ll pay for auto insurance on an older car is unique to you.
CAR INSURANCE COVERAGE REQUIRED IN MOST STATES
Drivers in most states are required to carry liability coverage, regardless of the age of the car. Each state sets minimum coverage limits that you must purchase to insure your vehicle. The Insurance Information Institute (III) suggests increasing your liability limits beyond your state’s minimum requirements, however, since liability coverage may help protect you from significant financial loss if you’re sued.
Bodily injury liability coverage may help pay for someone else’s expenses if you injure them with your vehicle. It may help cover victims’ medical expenses, income loss and your legal fees.
Property damage liability coverage may help pay for damage you cause to someone else’s car. It may also help cover damage to other property, such as fences, buildings, telephone poles and more.
CAR INSURANCE COVERAGE REQUIRED IN SOME STATES
Certain car insurance coverages are required in some states and not others. Check with your insurer or your state’s insurance commission to see whether you’ll need to carry the following coverages on your older car:
Uninsured and underinsured motorist coverage may help cover your medical costs if you’re injured by a driver with no insurance or not enough insurance. In some states, this coverage may also help pay to repair your vehicle if it’s damaged by an uninsured or underinsured driver.
Medical payments coverage and personal injury protection (PIP) may help pay for your medical care if you or your passengers are injured in a car accident. Medical payments coverage may help pay medical bills for doctor visits, hospital stays or surgery. PIP, which is not available in all states, may offer similar protection and also extend to lost wages, childcare and even funeral expenses as a result of a covered accident.
OPTIONAL CAR INSURANCE COVERAGE
If your vehicle is paid off — in other words, if the car’s title is in your name — some insurance coverages are optional. (Lenders typically require collision coverage and comprehensive if you’re still paying off your vehicle, the NAIC says.) Depending on your needs and your budget, adjusting these coverages might be an option for your older car.
Collision coverage and comprehensive coverage help protect your car. Collision may help pay to repair your vehicle if you hit a stationary object, like a fence or a tree, or if you’re involved in an accident with another vehicle. Comprehensive, on the other hand, may help pay to repair your car if it’s stolen or damaged by something other than a collision (such as a falling object or a fire).
Both collision coverage and comprehensive coverage typically come with a deductible that you may be able to adjust. Keep in mind, however, that while a higher deductible can lower your premiums, you’d likely end up paying more out of pocket toward a covered claim.
Additionally, the III suggests that if your older car is worth less than 10 times the annual premium you pay for collision and comprehensive coverage combined, these coverages might not be a cost-effective option for you. In other words, you might want to talk to your agent about whether it makes sense to drop these coverages from your older vehicle’s policy. But keep in mind, if you drop coverage and your car is damaged in an accident, your policy won’t pay for the damage.
Towing & labor cost coverage may help pay for services associated with roadside breakdowns, which may include towing, jumping a battery, changing a tire or assisting with a lockout. While this coverage is optional, it might come in handy in case you have problems with your older vehicle.
Of course, price should never be the only factor in choosing what kind of auto insurance you need for your «seasoned’ car. An experienced agent can help you choose affordable coverage that still helps protect your car and your family.
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Car Insurance Premiums, Deductibles and Limits Explained
This content is for informational purposes only and may not be applicable to all situations.
All of the Insurance companies we represent provide a wide range of auto Insurance products at a fair price. Your price gets even better if you qualify for any of our available discounts. When applying for auto Insurance in Rome, Georgia, you’re usually asked whether you want collision and/or comprehensive coverage, how high you want your deductible to be, what liability limits you want, and whether you want any types of optional coverage. We can help you understand what these terms mean and how much coverage is right for you.
Auto Insurance Coverage options in Rome, Georgia:
Collision and comprehensive (other than collision) coverages
Collision and Comprehensive (other than collision) coverages pay for damage to your automobile. You can purchase either or both of these coverages for each vehicle you own. If you have an auto loan you may be required to purchase both.
Collision coverage insures you against damage to your vehicle caused during an accident.
Comprehensive (other than collision) coverage insures you against all other physical damage to your car caused by such events as fire, theft, flood, and vandalism.
Collision and comprehensive (other than collision) coverage usually includes a deductible, which can range from $100 to $1,000. If your car is damaged, the Insurance company pays only for the damage in excess of the deductible you selected. The higher the deductible, the lower the premium.
Liability coverage pays for injuries you cause to other people and damage you cause to other people’s property when you are at fault in an automobile accident.
Medical Payments coverage
Medical Payments coverage pays medical expenses (up to a specified dollar limit) for you and passengers of your car who are injured in an automobile accident, no matter who is at fault. If you and your passengers have health Insurance, you may not need this coverage.
Personal Injury Protection
Some states require Personal Injury Protection, which is also known as No-Fault coverage. This coverage pays for things like medical and rehabilitative expenses, replacement services, and funeral expenses. It also pays for loss of income if you are injured in an auto accident and are unable to work.
Uninsured/Underinsured Motorist coverage
This coverage pays if you are injured by a person who is completely uninsured or doesn’t have enough liability Insurance to cover your injuries. It also covers you if you are in an accident with a hit-and-run driver.
Optional or special coverage includes extras such as towing, rental reimbursement, and roadside assistance. None of these coverages are required.
How much do I need?
Choosing the appropriate level of auto Insurance coverage depends on a number of factors, including assets you must protect (liability coverage), value of your vehicle (collision and comprehensive), the amount of money you can afford to pay out-of-pocket (deductibles), and your tolerance for risk.
Our professional auto insurance agents in Rome Georgia, including the Calhoun, Cartersville, Cedartown, Dalton, and Summerville areas, can assist you in finding the right car insurance you need.