# Car insurance on older cars



## digitalatlas (Jun 6, 2015)

Hi,

I have a 2008 Honda Accord and 2007 Acura TL which I use for pleasure and business. The Honda has 120k km on it and the Acura has 190 k km. Both are in fine working order, minor body imperfections. I plan to keep the Honda for at least another few years, the Acura maybe a year or two depending on repair costs.

Is it worthwhile to have collision coverage on these cars? My mechanic mentioned that it may not be worthwhile, because if I get into an accident, they will write off the $4-5000 in current market value and call it a day, and I will probably have to prove the market will pay that much, because the wholesale value is probably much less.

One online quote I'm seeing now looks like they only OFFER $1000 max coverage on the Honda (renewing next month)....and premium is $180 per month...

My Honda is renewing next month the premium is 1720 vs 1450 last year in Mississauga, and I'm annoyed by the 20% jump . If I don't have collision, that only affects me, right? If I get into it with someone else, their insurance pays them. Is this only true in Ontario? What if I travel out of province?


----------



## Mukhang pera (Feb 26, 2016)

I have never carried collision coverage on a vehicle more than 3 years old. After 3 years, the insurer (at least not ICBC here in BC) won't give you much if the vehicle is wrecked. To me, better to save the added premium cost and self-insure.

Yes, having no collision insurance affects only you. Collision coverage is sometimes called "own damage" insurance. It covers costs to repair or replace your vehicle if the damage was caused through your fault. If the fault is that of another driver, their _liability _(not collision) coverage should cover your loss. If you cause an accident in Ontario or in another province, your liability insurance should pay the other owner/driver (as well as personal injury damages, if any), but your own damage will not be covered.

You might want to consider keeping "comprehensive" or "specified perils" insurance. Such coverages are usually modest in cost and will cover things such as theft, a tree falling on your car, busted glass, etc. Check with the insurer/agent to see what gets covered and premium cost.


----------



## OptsyEagle (Nov 29, 2009)

digitalatlas said:


> One online quote I'm seeing now looks like they only OFFER $1000 max coverage on the Honda (renewing next month)....and premium is $180 per month...


I assume that premium is for your entire coverage, not just collision. If only collision, it is a no-brainer. Get rid of it. If it pays for your entire coverage then we would need to know what only the collision costs so we could advise. Most likely it will be a thumbs down but without the numbers, I cannot say for sure.


----------



## digitalatlas (Jun 6, 2015)

Thanks guys.

In the example, $180 was for total coverage for the car plus $500 in coverage for collision and comprehensive, each. It was so low, I thought it was the deductible, but it's actually the coverage! I changed the options for $0 coverage of collision and comprehensive, and the monthly premium from OTIP (my wife is an Ontario teacher) was still $150.

I checked out an online quote for Desjardins with 2 cars, and the premium was $160, also for $500 in coverage for collision and comprehensive.....seem like everything just jumped 20% this year, and different vendors are offering the same thing...

Maybe it's not worthwhile leaving my current policy, which was $120 last year and $150, which I thought was a bad deal. But maybe looking now, it's just the cost of insurance these days. $150 gets me an unspecified limit for collision and comprehensive, it just says All Perils, with a $500 deductible. The annual cost of this is $186, so it's pretty low (out of $1700 for the year) so they probably don't bother with a limit but will probably pay out pretty little anyway. Most of the annual premium comes from Liability.

That's crazy! How much would a new car cost to insure???


----------



## Rusty O'Toole (Feb 1, 2012)

There is a simple rule about insurance. Can you afford to take the loss yourself? Would you be wiped out financially or seriously inconvenienced if either car were wrecked or could you just go buy another car? If you can afford the risk you are better off to not buy insurance, for the simple reason that they must always charge more than the actual risk to make a profit and stay in business.

I don't have collision insurance on my cars. I reached this decision more than 40 years ago when they wanted $225 a year for collision insurance on a car I paid $750 for. You know what, I don't write off a car every 3 years. I have not written off a car in my life. So why pay for insurance? Now if I had a very expensive car, and could not afford to take the risk that would be different.


----------



## fatcat (Nov 11, 2009)

just renewed my insurance and faced the same question, i pay 350 for comprehensive / collision on a 2004 toyota echo (that still drives like a champ) and was reminded that my premium also covers third party liability so be careful when you drop collision (which i will do next year) that you keep the liability portion ... in my case i pay about 180 for the collision portion


----------



## agent99 (Sep 11, 2013)

digitalatlas said:


> That's crazy! How much would a new car cost to insure???


We have a new car (2019) value ~$42k and a used car (1998) value $3k on one policy. We have no collision on the 98. Yet premium on both cars is about the same. Reason they give is that the newer car is deemed safer or at least less likely to have a bad accident. Most of the premium is for liability. 

One thing to be careful about if switching insurance companies - On older cars, some will require you get a safety done. Cost of these has gone up in Ontario. Maybe $120? plus any work that needs to be done. Can easily wipe out insurance saving (We had to do that on our 98 when we switched to CAA)

By the way, I have two other old cars. They are valued at $6000 and $13000. If they had to be written off, I would get paid the full amount. Total premium for both cars in $250/yr. That is for liability, comprehensive and collision with $100 deductible! These are considered collector cars by Hagerty Insurance. No real limitation on use, except can't be used for work or everyday use. Vintage plates are also only $25/yr!


----------



## digitalatlas (Jun 6, 2015)

Thanks for those thoughts.

I would be paying for anything minor up to a few thousand out of pocket...though if something happened to one of these cars (knock on wood) I would not be willing to put a few thousand into repairs, it would be time for a new (likely pre-owned) car. When I removed collision and comprehensive, it only dropped the monthly premium from $180 to $150, so yes, most of the premium is going to liability coverage....I guess that would save me a like $360 per year....... 

The cars are worth about $4-5000 on the market now....if there was a write off...I guess paying the $360 per year for now would be worth getting a cheque for $4-5000....but I mean, this figure will drop substantially in the next couple years, so if the value drops down to like a couple thousand and I still have the car, then should save that $360 a year I guess.

I guess I will be staying away from CAA! I mean, I keep my cars maintained, so they hopefully would pass safety anyway, though I'm slowly thinking of letting them go because I don't know how much longer I'll keep them (i.e. when the cost of repairs should just go toward new car).

I'm surprised a vintage car is so cheap to insure, but I guess they expect minimal driving. Unfortunately won't meet my needs at this point.

Just pissed off because it jumped 20%. I certainly didn't get a 20% raise this year...CPI should stop tracking bread and corn and track car insurance, that's the true cost of living.


----------



## lonewolf :) (Sep 13, 2016)

Often it is not worth it to put in an insurance claim on a car that is not worth much as the cost of insurance will go up.


----------



## ian (Jun 18, 2016)

This will be a decision point for us Inlate March. Time to put insurance on our 2006 Accord (200k, like new) and in the summer our 2007 Solara rag top (100k,as new). In the event of a write off on either we would never get what ehither vehicle is worth to us in terms of a replacement


----------



## AltaRed (Jun 8, 2009)

ian said:


> This will be a decision point for us Inlate March. Time to put insurance on our 2006 Accord (200k, like new) and in the summer our 2007 Solara rag top (100k,as new). In the event of a write off on either we would never get what ehither vehicle is worth to us in terms of a replacement


That is almost always the case in quality vehicles. I am in a similar situation with my 2007 Infiniti with 195k on it. There is just no reason to replace it nor to carry collision on it. Just stay out of harm's way as best one can.


----------



## agent99 (Sep 11, 2013)

One thing we learned, was to check what coverage you have when you are on a trip and far from home. 

We had such a case. We were in USA and were hit by a US driver. Our insurer at the time, was The Personal (Desjardin). When we called them, they advised that other than the cost of repair or write off value, we had no further coverage. It was going to take the 2 weeks to get an estimate and decide on repair or write off. The car was badly damaged and not driveable. So we were faced with 2 weeks in hotel bills and rental car and living expenses. The Personal said to think of it as a mechanical problem (transmission or whatever). They were totally unhelpful, even although the other driver had admitted fault as scene of accident.

As it was, we got free advice from a US lawyer that I only knew from a car forum. He told me how to make a 3rd party claim on the other driver. That worked out fine. The Hartford paid all costs for our 2 weeks wait, gave us a very fair price when car was written off and paid for us to fly home with all our belongings. Sorting it all out was stressful and likely took a few years off my life! Not what you want to do on vacation!

Our current insurance wouldn't cover all of that, but it does cover some costs. Something to discuss with your agent and fully understand if you are doing long road trips. 

If your car is under warranty, also just as well to talk to dealer and understand what coverage you have when out of Canada.

PS: We switched from The Personal to State Farm local agent. But when SF were taken over by Desjardin, we moved to CAA. We have local CAA agent who is very helpful.


----------

