Do Older Cars Require Insurance?

Some considerations about coverage when you own an older vehicle

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.

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 aren’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.

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.