Older Car? Consider Reevaluating Car Insurance Coverage

When’s the last time you evaluated your car insurance coverage? When you buy a new car, it’s important to make sure it carries a full range protection, but you may be able to save money by reducing coverage as the vehicle ages. Here are some things to consider:

Optional vs. Required Coverage For Older Vehicles

Understanding what is mandatory and what is optional when building your insurance policy may help you save money in the long run.

What Does a Basic Auto Policy Consist Of? 

Typically, a basic auto policy consists of bodily and property damage liability, which most states require. These coverages protects you when you injure someone in a car accident or damage their car or property. Each state sets the minimum level of coverage, but you can always opt for more to extend your protection.

Some states also have additional coverage requirements, some of which include:

• Personal injury protection, which provides reimbursement for medical expenses for injuries to you or your passengers.
• Underinsured or uninsured motorist coverage, which kicks in when a driver with little or no coverage causes injuries or property damage.

What Are Optional Auto Coverages?

For most drivers with an older vehicle, collision and comprehensive coverage can be considered optional.

• Collision pays for repairing or replacing your car no matter who is at fault.
• Comprehensive pays for losses not caused by collisions, such as fire, theft, vandalism, animal strikes and broken glass.

The Right Amount of Coverage for Your Older Car 

If you buy collision and comprehensive coverage for a car that is at least 10 years old and you’re able to cover any repair costs out of pocket, you may be paying too much for car insurance. Repairing older cars typically is less costly than newer vehicles because they use less advanced technology. Replacement parts for older cars typically are less costly also. However, it all depends on your specific vehicle.

Even still, many consumers choose to err on the side of caution by keeping collision and comprehensive coverage for older cars, said Bach. Ultimately, the less car insurance coverage you have, the more financial risk you take on if you ever need assistance on the road.

Cost vs. Benefit Analysis

Before cutting back on coverage for your older car, you should take time to figure out how much it would cost to repair or replace it if you had to cover the amount out of pocket. It may make sense for you to keep as much coverage for your older car as possible, depending on your budget or if your vehicle has maintained a high resale value.

Determine Whether Your Older Car is a Classic 

Most cars lose value as they age, but in some cases older cars attain a greater value by achieving classic car status. When that happens, drivers often can find discounts by buying classic car insurance.

Classic cars generally must be at least 25 years old. You typically can find the best price on classic car insurance if you work with an agent who specializes in such policies, said Bach.

Often, insurance companies give classic car owners a price break because (typically) classic cars are:

• Driven less often than most vehicles
• Often pampered, and saved for special occasions
• Less likely to be damaged or totaled in accidents
• Kept in garages, making them less likely to be stolen

Before you buy insurance for a classic car, you may wish to have its value appraised so your policy will accurately reflect its worth. This is especially important if you have made improvements that have increased its value. Given the volatility of the car market, it’s important to have your vehicle appraised annually to ensure you’re getting an accurate value.

If you decide to store your car during harsh winter months and do not drive it for at least 30 days, you can save money by suspending your coverage, depending on where you live. Just make sure that the car is roadworthy before returning it to the highway in the spring.

Making an Informed Choice

It’s a wise choice to periodically reexamine your level of car insurance coverage to make sure you have the protection you need at a price that fits your budget. At The Hartford, we’re here to help at 800-423-6789.