Should You Carry Collision Insurance on an Older Car?

This year, each of my grown children and I have been involved in auto accidents. Each of the cars was old enough that a moderate hit was more expensive to repair than an insurance company figures the car is worth. Our experiences varied and might surprise you.

No collision insurance

My son was looking for an address and failed to see the light turn red. A car T-boned his on the passenger side. His liability insurance paid for the other car’s damage, but he carried no collision and comprehensive insurance for his own car. After all, goes one traditional line of logic, the car is 15 years old and was paid off years ago. That’s all true, but that didn’t mean he could afford to replace the car, even for one of the same value that his was before the accident. No, his only option was—and still is—to keep on driving it as-is while he saves up for a replacement. He is fortunate that the car still runs, drives and doesn’t even leak in the rain, although doors on that side are unusable.

My daughter was merrily driving down a multi-lane road when an SUV came off a side road and hit her car in the passenger side. Traffic was just too busy for the SUV to get all the way across several lanes without running into somebody, and she was in the way. The other driver’s insurance had lapsed, so she invoked her own uninsured motorist protection. Her insurance company paid the replacement value for her 17-year-old car, minus a $250 deductible. Why was she carrying such a low deductible? Because she drives a lot, in heavy traffic, sometimes spiritedly, and has absolutely zero cushion in the bank to replace her car should anything happen to it.

My own accident was my own fault; I took a corner too fast and slid into the curb in the center median. It damaged the suspension and frame, which is enough for insurance to write-off a 30-yr-old Toyota. But I wasn’t about to write it off. It was a full convertible—one of only 900 Toyota convertibles in 1981—that I had restored myself. I never lock the car since I would rather have a thief use the door handle than slit the top with a knife. That, along with custom upholstery and paint, is part of why I carried $100 deductible. Another big reason is that my insurance is only charging me $50 per year for collision and comprehensive with $100 deductible. So I was able to have the frame straightened and the suspension repaired, and still end up with $700 insurance money in my pocket. Now if I can just keep out of trouble for at least three years, my rates won’t go up!

This wouldn’t be complete without stating that I carry $1,000 deductible on my wife’s Lexus. She doesn’t drive as crazy as the rest of us, the logic goes, so she is less likely to cause an accident. And they weren’t giving me any price break on that car like on the old Toyota. So wouldn’t you know—a cedar tree falls on her car while she’s driving it! Seriously! The damage estimate—approximately $10 less than the deductible! Oh, and the tree was on my own property, and my homeowner’s policy has the same $1,000 deductible! If that isn't amazing enough, it was later that night that our son called to tell us about his accident (above), but now I've digressed.