You just bought a not-so-shiny, not-so-new car that does just what you need it to do: it takes you (or your teenager) to and from work (or school) without breaking the budget. Now you have 30 days to add it onto your existing policy. So, should you get full coverage? Of course you should. But there certainly is a strong incentive to reduce coverage on older cars since the insurance alone will soon cost more than the car.

In fact, conventional wisdom says that if your car isn’t worth more than a couple of thousand dollars, you shouldn’t buy collision coverage. If you get into an accident, you can just junk the car, whether or not you are at fault for the collision. But what happens if liability is contested? You probably won’t have to worry about an appraisal, because almost any damage to an older car will total it. But what about the towing and storage fees? Will you be in the position to buy a new car and pay to remove your car from the salvage yard while liability is determined?

I have had several clients who have been left with a bill as high as $2,000 for storing the car at the local salvage yard while liability was being determined. Even when the damage to the car is eventually paid for by the at-fault driver, only reasonable towing and storage fees are covered. So, with icy weather approaching, this may be a good time to check your insurance coverage and decide whether you think it’s worth a few extra dollars a month to have a some property coverage, even on the car you don’t intend on repairing after an accident.


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