Should i carry comprehensive insurance on an older car

Here's what you need to know...

• Some older cars need classic car insurance if they’re older than 20 years and rarely driven
• Cars that haven’t depreciated much in value should carry collision and comprehensive insurance 
• Cars that break down frequently should carry roadside assistance coverage 

The best type of car insurance for older cars depends on the overall value of your vehicle, and whether it’s a classic or not. You will always need to carry liability car insurance on your older car. Still, optional car insurance coverages like collision coverage or comprehensive coverage aren’t always necessary on an older vehicle that has significantly depreciated in value.

Read on to learn more about older car insurance. We’ll cover everything about older car insurance, such as required coverages, classic car insurance, optional coverages, and more.

• Best Type of Car Insurance for Older Cars 
  • Required Car Insurance for Older Cars 
  • Classic Car Insurance for Older Cars 
  • Optional Coverages for Older Cars Not Depreciated in Value 
• Coverages to Consider Dropping for Greatly Depreciated Cars 
• How to Find Cheaper Insurance for an Older Car
• The Final Word on the Best Type of Car Insurance for an Older Car 

Best Type of Car Insurance for Older Cars 

When considering the best car insurance type for your car, determine the insurance requirements in your state. Then, you need to check its overall value and whether it counts as a classic. We’ve outlined how to pick the best car insurance for your older vehicle below.

Required Car Insurance for Older Cars 

Almost every state requires drivers to carry liability auto insurance coverage on their vehicles. The coverage amount varies from state to state, but no matter how old your car is, you need to have liability insurance on it. 

Liability insurance often includes bodily injury and property damage. These liability coverages pay for the other driver’s repairs and medical bills up to a certain amount.

No matter what type of older vehicle you drive, it’s best to have higher liability coverage than the minimum required amount, as it will better protect you if you cause an expensive accident.

Classic Car Insurance for Older Cars 

Generally, if your car is older than 20 years, your insurance company may consider it a classic car. Older cars may be worth more than the depreciated value, especially if they are classic collector cars. 

However, you must also meet the driving requirement for your car to be considered classic. You can’t use your classic car for everyday driving. Instead, classic car insurance is for rarely used older cars. Since older cars use a lot of gas and are less dependable on the roads, most drivers don’t use their older cars frequently if they’re classics.

Suppose you qualify for a classic car insurance policy. In that case, you should purchase it over regular car insurance, as a classic car policy better considers your car’s actual value, especially if you’ve had work done to it. Classic car insurance also offers total protection for your vehicle, including liability, collision, and comprehensive coverage. 

Optional Coverages for Older Cars Not Depreciated in Value 

If your car hasn’t significantly depreciated in value, it’s usually worth carrying more than the minimum coverage. Higher coverage levels ensure you’ll receive your car’s value after an accident, rather than just being protected from liability issues.

If your car still has good value, you might want to consider the following optional coverages. Most of these coverages will protect your assets in a car crash, whereas roadside assistance is good for breakdowns:

• Collision coverage. If you crash into another car or object, collision coverage will pay for repairs to your older vehicle.
• Modified car coverage. You should get modified car insurance coverage if you’ve had any work done to your older car, such as adding tinted windows or a custom paint job.
• Comprehensive coverage. Comprehensive coverage helps pay for repair costs from several non-collision incidents, such as vandalism, natural disasters, animals, and more.
• Roadside assistance. Older cars may break down more often. Roadside assistance helps with towing, jump-starts, and more.

If your vehicle is worth a lot or you’ve had expensive modifications done, you should consider adding on some or all of the above coverages. Otherwise, if your older vehicle is in an accident, you’ll have to pay for repairs yourself or consider totaling the car.

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Coverages to Consider Dropping for Greatly Depreciated Cars 

If your car has depreciated in value so much that it is worth very little, you should consider dropping optional coverages and carrying only liability insurance. 

The Insurance Information Institute recommends the following rule of thumb: If your vehicle is worth less than “10 times the premium,” you can consider getting rid of extra coverages like collision and comprehensive insurance. The Institute recommends this because what you’re paying for monthly rates will likely equal the car’s value in a few years.

If you’re unsure what your car is worth, you can visit a site like CarFax or Kelley Blue Book to check the value of similar used makes and models. You can also ask your insurance company to estimate your car’s value.

If you have a lease or loan on your vehicle, you’re probably required to have comprehensive and collision coverages. The company that gave you the lease or loan wants to protect its assets, so there’s usually a requirement in your contract to carry comprehensive and collision coverages.

You can only consider dropping additional required coverages once you fully pay off your vehicle. However, you should only do this if you meet the 10% above rule.    

How to Find Cheaper Insurance for an Older Car

There are numerous ways to reduce your rates on car insurance for an older car outside of dropping optional car insurance coverages. If you don’t want to drop coverages, the following tips can help you save on car insurance:

• Use discounts. Take advantage of all available discounts, from paperless discounts to safe driving discounts.
• Raise deductibles. Raising your deductible will reduce your overall rate, but you’ll want to ensure you’re willing to pay the deductible if you get into an accident.
• Shop around. One of the best ways to find cheaper rates is to shop around and get quotes from different insurance providers.

If you don’t feel comfortable dropping optional coverages on your car, even if it’s no longer worth much, you can still save while keeping full coverage on your older car. If you think you’ll end up paying more than your car’s worth in insurance rates over a few years, it’s probably best to eventually cut your coverages or raise your deductible.

The Final Word on the Best Type of Car Insurance for an Older Car 

The best car insurance type for your older car depends on whether it’s a classic and its overall value. If your vehicle isn’t worth much, you may be able to carry the bare minimum coverage. However, if your car is classic or still worth a significant amount, you should carry full coverage to avoid a financial loss after an accident. 

If your car is worth more and needs fuller coverage, shopping around for insurance quotes can help you find a better rate for your older car. 

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A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs. Full Bio →

Written by Laura Berry Former Insurance Agent

Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo... Full Bio →

Reviewed by Joel Ohman Founder & CFP®