Insurance Center

You’ve been looking for that special car you want for ages. You want a used model because a new one is out of your reach. After months of searching, you find one. You test drive it, you haggle over the price, you spend hours checking it out, you organize the money and finally everything is ready.

Now you need insurance. There’s a lot to think about. The state minimum requirements for auto insurance coverage vary. Where I live, the minimum requirements for auto insurance coverage is 25/50/25, which translates out as $25,000 per person, $50,000 per incident, and $25,000 for property damage. Remember that these are the absolute minimum requirements by law. I recommend carrying more than that in bodily injury and liability/property damage coverage. If you cause a multiple-car pile-up, or even cause an accident where a few people are injured, the chances are that you would cause more damage than you think. The extra premium you are paying for more coverage is well worth it.

As far as comprehensive and collision coverage are concerned, it is important to consider what deductible amounts would work for your used car situation. It is important to keep in mind that the higher your deductibles are, the lower your premium amount will be for that year. There are two kinds of deductibles: ‘Comprehensive’ and ‘Collision’. Comprehensive pertains to any damage caused to your vehicle by vandalism, acts of God, hit-and-run, and hitting an animal. Collision has to do with actually hitting another vehicle while on the road. Comprehensive claims do not affect your future insurance premiums, but collision claims will negatively affect you future premiums. This means that you should have a lower comprehensive deductible, and a higher collision deductible. I personally carry a comprehensive coverage of $100 and a collision of $1000. Also, glass is covered under the comprehensive deductible. Some insurance companies have a $0 deductible for glass coverage, so ask your agent about this.

If your used or older car is not worth more than $2000, then take “liability only” insurance. That way, you are not paying for a collision deductible if it would cost you more to pay out the deductible than the vehicle is actually worth. But don’t forget about the bodily injury liability coverage, as this could cover you if you are at fault in an accident. If you injure someone, you cannot simply claim that you are broke and have no coverage, you will still have to pay for the injuries or property damage.