Your Guide To Insuring An Older Vehicle

If you're thinking of purchasing an older car, it's important to spend some time thinking about insurance coverage. The type of coverage you need and desire for an older vehicle, after all, may not be the same as the coverage you'd choose for a new one. Here are some of the intricacies to keep in mind as you peruse insurance companies and their policies.

Does the car qualify as a "classic?"

There are old cars that are simply near the end of their years, and then there are old cars that have antique value. These are two very different beasts when it comes to insurance! On your basic older car that you plan to "drive until the wheels fall off," you'll typically pay a lower insurance rate since the insurance company won't have to pay much to replace your car if it becomes damaged. On an older car that's considered a "classic," however, your insurance rate may actually be higher than with a new car because the cost of replacing that car might be pretty high. So, before you purchase any older car, be sure you have a good handle on its actual value. Resources like Kelley Blue Book are a good place to turn. The lower the value, the less you can expect to pay for insurance.

Do you really need collision and comprehensive?

If the older car is not worth much at all, you may even decide to forgo collision and comprehensive coverage. This means that if you get in an accident that's your fault, you'll have to pay out of your own wallet to repair or replace the car. If the car is only worth $500 or $1,000, you might be willing to take on that risk in exchange for lower insurance premiums. However, if you know you'll have a hard time cobbling together enough money for even a cheap replacement vehicle if something happens to your current one, you might be better off paying for the collision and comprehensive coverage.

How much medical coverage should you have?

Older cars were not always built as safely as new ones. For instance, most don't have side air bags and backseat airbags. This means your risk of having serious injuries may be higher in an older car. You can look up your car's safety ratings to be sure. If you do find that the safety ratings for your vehicle are not top-notch, you might want to consider purchasing more medical coverage than you otherwise would just to make sure you're covered in the case of a serious collision.

How much liability coverage do you need?

Liability is the type of auto insurance that you typically must have, by law, in every state. Each state has its own minimum requirements in terms of how much liability coverage you have to carry. Liability coverage comes into play if you get into an accident and cause injuries or damage to another person, their property, or their car. The extent of damage you can cause doesn't really change based on the age of your car. So with your old car, as with any car, you need to be mindful of your state's minimum requirements and your own ability to pay costs above those covered by your policy. While you'll pay higher premiums for a policy with more coverage, your risk of having to cover damages out-of-pocket goes down. Your insurance representative can better help you assess your own situation and choose a level of liability coverage that's right for you.

Insuring an older car has its intricacies. Make sure you get the right type of level of coverage so you're not stuck with bills you can't pay.