Carry Collision Coverage for Older Cars?
Husband jokingly comments to a friend that we finally have a car made in the 2,000's! Our other vehicles are a 1993 Camry and a 1997 Bonneville. Our new to us car is a 2005 Toyota Camry with 83,000 miles. For a Camry this mileage means many years of continued driving. Husband found us a gem to drive at a $1,000 below Blue Book value. The mechanic who checked it out before our purchase said it looked great!
Imagine my pleasure driving the car a few days later to go and visit a dear friend. Nice interior and with only a little paint fade on the roof and a nice ride, I felt very blessed. Stopping at a grocery store on my return from my visit, I picked up a few things and then was about to head out to pick Husband up at work. Diligently checking behind before pulling out of the parking space and seeing all was clear, I started to back into the driving aisle. That is when the contact of another vehicle took place and my "new" car now had a big dent on the rear right side.
Trust me, calling Husband with this news and request as to how to handle this situation was not fun. Husband told me to be sure to get the other car's insurance information and name and address. A gracious young women came to me as I left my car and said she had insurance and was sorry for what had happened. She had not seen me when she left her space. Her SUV type vehicle was not damaged. We exchanged information and I told her that Husband said she should contact her company and we would be as well.
This saga continues as the insurance company does not want to pay the entire amount and we are working through those details at the present moment. My question for consideration is this: Do you carry collision on older cars? We have not done so in the past. This has actually paid off for us as we have had almost no incidents requiring body work. However, now we are reconsidering as our "new" car, although not really new, is not one we could easily replace. What do you do regarding carrying collision insurance? Let me be sure to explain that we do carry auto insurance of the liability kind and always seek to be responsible for providing protection for our family and others.
I have tried to keep a some kind of a sense of humor about all this. Laughingly, several times after this incident, I made the comment that it was too bad the damage had not come to the older vehicles we had been driving with their dings and fading paint. So a few days later, Firstborn Son and family were driving in one of our other cars as theirs was in the shop only to be swideswiped by a driver with no license and who did not speak English. We were so grateful that no one was hurt and this driver when seeking to run from the scene of his crime actually hit another car and was forced to stop.
Fortunately we do have uninsured motorage coverage for this vehicle. Just a bit frustrated as this was the car we hoped to sell soon.
Back to my original question. Do you carry collision on your older cars?
6 Responses to “Carry Collision Coverage for Older Cars?”
September 4th, 2012 at 6:22 am
We have always carried full coverage on our older (purchased used in cash vehicles). We know that if we got in an accident it would be to our advance to have the insurance company pay to repair our car and provide a rental than it would for us to come out of pocket to pay for everything. It also won cost us more time to save then money to buy a new car in the event our vehicle was totalled and we didn’t have full coverage. We actually had full coverage a few years ago and my husband was hit. The insurance company wanted to total the vehicle but we refused. We took their check and repaired our car and had money leftover. We drove the car 2 more year and ended up selling it once we purchased another new to us used vehicle.
September 4th, 2012 at 6:36 am
I am the daughter of an insurance agent. Here is my take on ALL insurance. You insure that which you cannot afford to replace. We have, in life, dropped collision, at a time, when we knew if the car was totaled, we could replace it. (Of course we always carry liability)
This goes for all insurance. For example, my husband is retired. At an earlier stage in life we carried an amount of life insurance on him to insure MY and the children’s quality of life should he pass (this is not a man thing anymore but I will not digress on that). His retirement income goes to me now, so life insurance at the same level is not a need.
I don’t need to tell you that every time you step in the check out line at Best Buy you are asked to insure your purchase. This is madness. You can be over-insured!
If you stick with the rule “can I replace this easily and within my resources?” that can answer the question in every situation.
September 4th, 2012 at 7:00 am
I write about insurance topics for a living, so this is one I address often.
Insurance’s primary function is to protect your financial assets. In the example above, life insurance protects the assets the bread winning spouse would bring in if he were to die.
You should carry collision and comprehensive (they are usually sold together though they are in reality two separate policies) unless you can afford to replace the car or cough up the repair bills yourself.
Another way to figure it is the “ten times” rule of thumb. If the value of the car is more than ten times the price of the premium for comp and collision (not the entire premium, just the price you pay for those coverages), then you should carry comp and collision until the value decreases to reach that amount.
Yes, you can be over insured. But with car insurance, because we’re talking about quite a bit of money tied up in the vehicle, you want to make sure you have enough.
September 4th, 2012 at 1:41 pm
I will always carry it on a vehicle that I cannot afford to replace, and continue as long as paying the premiums is not outweighing the replacement cost of the vehicle.
September 5th, 2012 at 9:14 pm
No, we don’t carry collision coverage on our cars as I don’t think it is worth the expense. We carry only the legal minimum for car insurance in our state. I think it makes much more sense to bank the amount we would pay for collision coverage in a savings account.
If we were in an accident and either my husband or I was at fault, we would not fix cosmetic damage to our car. (We view cars as a tool, not a status symbol, so dings aren’t a big issue to us.) If the car damage was severe we can use the money we have saved by not having collision insurance to repair the car or replace it. (If the other driver was at fault, his insurance would cover the damage and if the other driver didn’t have insurance, then uninsured motorist cover, a requirement in my state, would cover the damage.) If we are not in an at-fault accident (so far so good!) we can put the money we’ve saved towards a new to us car when the time comes.
This works for us because my car is from 2004 and my husband’s is a 1995. We plan to drive both into the ground so resale is not a big incentive for us. Additionally, although we have two cars we could easily make do with just one and probably painfully do without a car all together. Further reason why expensive insurance isn’t a good buy for us.
September 6th, 2012 at 12:27 pm
We carry full coverage on our two main cars, if we have a third, and at times we have, then we drop the oldest car to liability only because we can live without a third car. We have also had only one car, and if carrying full coverage makes my husband feel secure that we won’t be in that situation again, then I happily pay the bill.
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