‘Is there full insurance coverage on older cars?’ [Newbie Guide]

With unpredictable driving situations made even more challenging by erratic and impulsive habits by other motorists, probably the only thing that protects you other than defensive driving is having comprehensive insurance on your car.

Having comprehensive insurance is a must, especially for brand-new cars

Despite being an additional expense, having comprehensive insurance is a necessary evil, especially if your car was purchased through financing. Just think that what you get in exchange for paying the annual premium is complete coverage for the vehicle against most unexpected or unwarranted events such as accidents and natural disasters.

Auto insurance covers the cost of repair or replacement of parts (in extreme cases, even the entire vehicle). But say you’re driving an old model and you find yourself involved in a fender-bender on the road. You file a claim with your insurance company expecting that you won’t be paying for anything apart from the participation fee, but then you receive a bill for part of the repair amount.

But even older cars deserve to be protected too

Is it a scam? Not necessarily. See, auto insurance isn’t an absolute deal. On brand-new cars, the coverage is as good as it gets, leaving you with no expenses to worry about for the first two or three years of ownership.

At the end of that time, the comprehensive insurance still applies, but now the contract stipulates that the policy owner will have a corresponding share of the expenses for the car’s repairs, to account for the vehicle’s depreciation over time. This could start as little as 15 percent and steadily increase annually as the car gets older until it reaches 50 percent, where it will likely be the fixed rate going forward for the rest of the vehicle’s lifespan.    

Depreciation is a major part of comprehensive insurance for older models

Generally, the good thing about having an older car is that depreciation makes it progressively cheaper to insure in the long run, since more recent models are more expensive to protect. The flip side there is that you may want to save up on the side, in case your old car uses particularly expensive replacement parts that your insurance might not cover.

Find more tips for beginner drivers at Philkotse.com.