I have an old car of a car that isn’t worth much — do I really have to buy auto insurance?

The age of your vehicle is only an issue when it comes to collision insurance. The majority of states require drivers to have some form of liability coverage. Once you understand the difference between collision and liability insurance, you will understand the type of protection you need.

Collision Insurance

This type of auto insurance covers damage to your vehicle. If you were involved in an accident, the insurance would help you in paying for repairs. Collision insurance is normally required if you have a loan for your vehicle. However, it is required by the lending agency, not by the state. A comprehensive policy would also protect you if your vehicle was stolen or otherwise damaged.

If you own an old car, carrying the extra insurance may not be in your best interest. For example, if your car has a value of $600 and you have a $500 deductible, you would only receive $100 if your car were totaled. However, even if you do not have a loan, if you drive an expensive vehicle the extra insurance is a good idea.

Liability Insurance

Liability is the coverage designed to protect other drivers, property owners or passengers in your vehicle. Virtually all states require that you have a certain amount of insurance in the event that you damage another vehicle or cause property damage or bodily injury. The amount varies by state and some states accept financial bonds as proof of responsibility.

If you are in a state that requires insurance, not having it can subject you to fines and penalties. You could lose your license and potentially serve jail time. You also subject yourself to the possibility of a lawsuit that could wipe you out financially.

You can use our online comparison service to get quotes from multiple insurance providers. We do not want you to be caught without the auto insurance you need, even if you own an old car. Contact us and let us help you with your insurance requirements.