What is the Right Insurance Coverage for High Mileage Cars?

The mileage your car has covered can affect your auto insurance choices. High mileage cars may not require coverages like comprehensive and collision. As you continue using your car, it depreciated in value. The biggest depreciation in the value of a vehicle is witnessed within the first two years after purchase. When the ownership of a car is transferred to the buyer, the vehicle immediately depreciates.

A large amount of automobile value is immediately lost when you drive it from the dealer. If you were to turn back and sell the same vehicle to the dealer, it would fetch lower price than you bought it.

Auto insurance needs to be reviewed when your car has covered more mileages. If you have been using your car for the past four to five years, it is time you considered the kind of insurance coverage you should hold. The more years you have used your car, the more the mileage you have covered.

An old car is likely to experience mechanical breakdowns than a new car. A car with more than five years of use may be costing you more premium payments than the value of the vehicle. The most appropriate coverage for high mileage cars is liability insurance. This coverage protects you against liability you bear when you cause damage or personal injuries to other motorists.

However, this coverage does not coverage you and your vehicle against injuries and damages respectively caused by you. It is not a bad idea to drop some of the coverage you have bought for your high mileage car. One of the coverage you can do away with is collision coverage. This kind of car insurance pays for damages on your car and not the other motorist’s vehicle.

Another coverage that you may need to drop when using a high mileage vehicle is comprehensive coverage. This insurance policy covers damages that are unrelated to collision including storms, theft, fire and earthquakes. If you have collision and comprehensive coverages, and a claim is made against those coverages, they can easily equal the value of your car.

In this situation, your car is considered as totaled for auto insurance, which means that it is not insurable anymore. When an accident occurs, an insurance company sends adjusters to evaluate the damages and the value of the car. A car is considered as totaled if the cost of repairing is more than its current value.

If the value of your car has diminished, holding these kinds of coverage may only be a burden to you. Because an old car will experience mechanical breakdowns, you may consider other coverages like towing, mechanical breakdown and rental car reimbursements.

In summary, when your vehicle depreciates to a large extend after many years of use, you should review the insurance coverage you have purchased for the vehicle. You may be paying more premiums than what the value of the car is and this is a burden to your finances.

Opting for a liability insurance which is a mandatory coverage and doing away with other coverage like comprehensive and collision may help you save money in your insurance payment. You also need to ensure that you drive carefully and be prepared to meet the cost of your car damages and personal injury costs when you are at fault in causing an accident. Otherwise, the liability for damages of other motorist’ vehicles is covered by the liability coverage.