Should I get collision and comprehensive on an older car?

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It can be tempting to try and lower your insurance costs on that trusty old car by getting rid of optional coverage like collision and comprehensive. But these coverages are actually quite affordable (in many cases less than $250 a year even if you have a couple tickets). And if you do get in an accident, it’ll save you a ton of hassles and provide you with a free rental car while your own car is getting repaired. For illustration, we ran auto insurance quotes on carpages.ca’s 15 most reliable cars of all time.

It’s not exactly the million dollar question, but certainly a stubborn one as your car gets older. Collision, or not Collision? Comprehensive, or not comprehensive? Is it worthwhile to reduce your coverage to save a few bucks? And exactly how many bucks can you save? How do you make the best decision that balances coverage and price?

So let’s try and shine some light on the situation before you start rummaging through the storage closet looking for that magic eight ball to settle things once and for all…

How do I know if collision and comprehensive are worth it for me?

The basic way to calculate whether collision and comprehensive are worth it is to take the value of the car and subtract the insurance costs.

  1. Find out the actual cash value (ACV) of your vehicle. Your insurance provider will put this value on your vehicle when preparing a policy.
  2. Take this value and subtract any deductible you would have to pay.
  3. Reduce this amount by your insurance premium.

Real quotes for reliable older vehicles

To give you solid info to make a good decision, we wanted to get you real life quotes on some of the cars that are most likely to still be on the road from way back in the day.

Based on carpages.ca’s list of The most reliable cars of all time”, we used our online auto insurance quoter to get accurate, current prices for 4 fictional drivers.

Here they are:

  • Ben, single male, 35, Cornwall, clean record
  • Schachni, married female, 47, Etobicoke, 2 minor tickets
  • Archie, common-law male, 54, Keswick, 1 minor ticket
  • Minnie, divorced female, 67, Markham, at-fault plus 1 minor ticket

Costs below reflect only the cost collision or comprehensive coverage, not the total premium. Unless otherwise specified, vehicles are 2010 models. ACVs are from kbb.ca and assume the car is in good condition and has 100,000 km.

Annual costs for collision and comprehensive coverage
Vehicle (2010 model unless specified) Current value (ACV) Ben Premium Schachni Premium Archie Premium Minnie Premium Avg Premium
Volvo 8501 NA 92 95 72 223 $120.50
Ford Escort2 NA 104 101 71 230 $126.50
Mazda MX-5 $17,400 125 132 93 327 $169.25
Mazda 3 $10,379 193 171 119 405 $222.00
Honda Civic $8,590 194 183 126 412 $228.75
Hyundai Elantra $7,550 199 183 126 441 $237.25
Subaru Outback $16,204 206 203 142 424 $243.75
Toyota Corolla $10,971 211 198 138 469 $254.00
Honda Accord $13,430 190 228 158 473 $262.25
Honda CRV $14,569 216 212 148 483 $264.75
Toyota Camry $12,842 223 247 172 484 $281.50
Acura TSX $12,381 252 259 181 475 $291.75
Audi A4 $12,731 300 316 222 560 $349.50
Lexus RX 350 $21,076 335 362 255 574 $381.50
Lexus LS 400 $23,712 578 562 394 1,328 $715.50

This will give you an idea of whether or not collision and comprehensive is worth it for you. But also remember to think about how often you use the vehicle, what kind of roadways you drive on, whether you drive a lot on wet or icy roads, and also, most importantly, whether or not you could afford to repair or replace your vehicle should an incident occur.

Are collision and comprehensive mandatory on an older car?

No. The fact is you don’t need to put collision or comprehensive coverage on your car insurance policy if you own your car outright.

In Ontario, and any province that has so-called “no fault” insurance, you need to have what is referred to as Direct Compensation Property Damage, or DCPD, coverage. Every car insurance policy in the province includes DCPD coverage. This pays for damages which you yourself are not liable for in the event of a collision.

In addition to DCPD, a stripped down, basic insurance policy is required to include:

  • Third party liability with a minimum value of $200,000 – this covers any damage you are responsible for, to either people or property, up to…well… $200,000. (We recommend $2 million, and it won’t cost much more.)
  • Accident Benefits coverage – this covers you and your passengers for medical bills that are not covered by OHIP (such as physiotherapy, home care, and the like), and can compensate you for some of the income you lose while you recuperate.
  • Uninsured or underinsured coverage – this covers you for damage and extra medical bills, including funeral expenses, incurred after being hit by an uninsured, or underinsured, driver.

Important exception relevant to this discussion: While you will still be covered for extra medical bills, funeral expenses etc., uninsured and underinsured coverage does NOT cover you for damage to your vehicle if the person who is at fault is not identified….in other words, this does not cover you for any damage to your vehicle caused by a hit-and-run.

This is where collision coverage comes in.

What are the benefits of collision coverage on an older car?

The mandatory DCPD coverage in your car insurance policy pays for damages incurred in accidents that were completely someone else’s fault.

So far, so good.

But…this requires your insurance provider to confirm that the other vehicle involved in the accident has insurance, and that you are not at least partially at fault. If it is concluded by the insurance companies that you were 50% at fault, you would be liable for 50% of the damages, and so on.

With collision coverage, this delay in processing the claim can be avoided, as you will be covered for damages regardless, and your insurance provider will only be looking to confirm if your deductible applies to this particular situation.

Beyond a more hassle-free claim, other benefits include:

  1. Coverage regardless of who’s at fault – Collision covers the repair or replacement cost of your vehicle if you are the one at fault
  2. Coverage for a hit and run – Collision covers damage caused to your vehicle by an unidentified third party, or hit and run. With standard DCPD, you are not covered if the other driver is never identified!
  3. Possibility of a “loss of use” endorsement – Collision also enables you to add a loss of use endorsement to your policy, meaning a rental car will be provided while your vehicle is being repaired. This is particularly valuable if your car is the only way for you to get around, or get to work. Cause when it comes to keeping mobile, something is definitely always better than nothing!

But isn’t it better to just by-pass insurance so that my premiums don’t go up?

It’s true that an at-fault claim will increase your premiums going forward, leading many people to just pay the repair bills out of pocket. But remember…

  • You are obligated to report all accidents to a collision reporting centre regardless of whether you make a claim. If you report the accident and you’re found to be at fault, it doesn’t matter if you proceed with a claim. It’s on your record.
  • If you exchange insurance information with the other driver involved in the accident (which you legally must do if asked), you can assume they will report the accident. Even if you don’t exchange info, how hard is it for the other driver to note your license plate? Either way, the accident is likely on your record.
  • If the police were at the scene, it’s on your record.
  • A bystander could have witnessed the accident and reported it.

The moral of the story is that, even setting aside your legal obligations, accidents have lots of ways to get on your record. So you may as well make a claim.

The good news is, if you are not at fault, the claim doesn’t increase future premiums. Even if you are at fault, if you have a fairly clean record, most insurers offer accident forgiveness, although you’d have to buy that before any accident happens.

Okay, so what are the benefits of comprehensive coverage on an older car?

While comprehensive coverage isn’t as comprehensive as the name implies, it can also prove quite useful. It covers damage resulting from specified risks or perils. These risks include:

  • Theft and vandalism
  • Fire
  • Hail
  • Falling or flying objects

A personal example of the benefit of having comprehensive coverage:

A colleague here at Mitch recently incurred damage to the front end of his vehicle after some unidentified debris flew off a passing truck. The debris caused $1,700 worth of needed repairs. And though his deductible was $1,000, having comprehensive was still worth it. The benefits included:

  1. Free rental car while the car was repaired – by adding the loss of use endorsement available with comprehensive coverage, you can save yourself about $40 a day. And the rental can be picked up where the repairs are being done.
  2. Everything was arranged by the adjuster – no worries about securing a rental vehicle or making a ton of phone calls. Because insurance companies deal with body shops and rental agencies all the time, they can arrange everything for you, making it all the more convenient and hassle free.
  3. It had no affect on his future premiums – your insurance premiums will not go up because of a comprehensive claim, so the amount you save on repairs and rentals will not cost you more down the road.

The thing to think about when contemplating comprehensive is the environment in which you drive and park your car. Do you drive on highways with a lot of construction vehicles? Do you park on the street? Or under heavy trees? Is your neighbourhood safe? Are theft and vandalism common where you live or work?

If so, then comprehensive might be a good option for you. And hey, anyway, in the end you just never know when a tree is going to fall on your hood!

Not only can comprehensive give you a little peace of mind, it’s also not as expensive as you probably think!

Find out exactly how much for your older car

Yes, it’s a tough call. But instead of giving that magic eight ball another shake, give Mitch a call at 1-800-731-2228. Our brokers can help you make the decision that’s right for you and your trusty old vehicle.

1 The Volvo 850 was discontinued in 1997, so our quotes are on a 1997 model. No listed value on kbb.ca.
2 The Ford Escort was discontinued in 2003, so our quotes are on a 2003 model. No listed value on kbb.ca.


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