How Much Car Insurance Coverage Do Seniors Need?

No matter what your age, the protection provided by your auto insurance policy should match your personal needs. Depending on what your insurance agent offers versus what coverage you decide you need, the kinds of coverage you purchase may include numerous variables such as:

• Medical payments, no-fault or personal injury protection coverage
• Bodily injury liability
• Property damage liability
• Collision coverage
• Comprehensive physical damage coverage
• Uninsured motorists coverage
• No-fault insurance
• Rental reimbursement

While these variables may seem a long list to remember, refer to "10 Must-Know Car Insurance Definitions" for a quick and convenient refresher.

Review Your Current Insurance Coverage

Given the volatile nature of the world's finance and insurance sectors, so much is changing in the auto insurance industry. In spite of this mayhem, one thing you can do is to help keep expensive auto insurance rates in check.

Be sure to make an appointment with your agent to review what coverage you have in your current auto insurance policy. Make certain to review the terms listed above, and determine whether to add, reduce, or altogether drop certain coverages in the list.

Match Your Insurance Based On Two Lifestyle Categories

To help you assess the level of coverage you may wish to keep, it's helpful to break down your needs into two general lifestyle categories: activity and location. Let's delve into both of these, but first...

After retirement and getting re-situated into a more self-sufficient lifestyle, some seniors opt not to drive a car or truck at all. After figuring the overall costs of operation a vehicle (including insurance costs) versus using alternative transportation, some prefer going with the bus, walking, calling a taxi, or perhaps hitching a ride with a friend who still has a car.

Assuming you're not one of these people, let's discuss the level of activity that requires the continued use of a car or truck. Make notes as you go, and be sure to discuss them with your insurance agent on your next visit.

Activity

One factor determining how much insurance you will need is whether you will be carrying passengers in your car. If you like to go out with friends and frequently take one or two along with you, you may consider beefing up your insurance coverage for their sake. If you drive solo, or only rarely with friends, then reduce this coverage.

Do you drive frequently, or only rarely? Depending on how often you use your car or truck, you may opt to raise or lower your auto insurance coverage in step with how often you use your vehicle. It doesn't make sense to purchase as much auto insurance coverage as you can get if you drive your car only once a month to get groceries from the store just a few blocks away.

Some seniors don't really retire. They like to keep on the go. After a lifetime of working for someone else, perhaps you may wish to open your own business and use your car to supplement your business. In this case, you may wish to increase your overall auto insurance coverage to match this lifestyle. You may even wish to consider purchasing Commercial Umbrella Insurance.

Location

Location and the environment in which you live are also key to how much auto insurance coverage you may wish to consider.

It goes without saying that city driving is generally more risky than driving in the countryside. More people, more intersections, and more cars mean a higher chance for mishaps. On the other hand, if you have retired to a cozy corner of the countryside that sees few wheels passing by, you may wish to reduce your coverage to match this scenario.

However, just because you live in the country doesn't mean you absolutely have to reduce or even drop as much coverage as possible.

If you drive on country roads that aren't well salted during the winter, you may wish to beef up your coverage on the more likely chance your car or truck slips off the road into a ditch. In wooded countryside areas, are you more likely to strike an animal crossing the road? This is something you wouldn't plan for in a city.

When it comes to location, try considering both sides of the coin before making any decisions on adding, dropping, or changing your current auto insurance policy.

Mandated Insurance Coverage

Remember, depending on the state or province in which you live, please keep in mind that certain coverage cannot be dropped and must meet certain minimum requirements. For example, while certain principalities require an uninsured motorist clause, the coverage this provides may be different from region to region.

Discuss these factors with your agent, and adjust your policy if needed.

Safe driving!

Sources:

"10 Must-Know Car Insurance Definitions" by John Melendez, Associated Content

"Commercial Umbrella Insurance" by John Melendez, Associated Content

Suggested reading:

"Does Your Credit Score Affect Your Auto Insurance Rates?"