Got an older car with lots of miles?
“Full coverage” insurance may not give you the protection you think it does. Illinois law requires you to carry liability insurance of at least $20,000.00. But many people think that if they get “full coverage” insurance, and their car is damaged by another person’s negligence, then they will get their car repaired and back on the road thanks to that insurance. Not so fast. Some insurance companies don’t bother telling you when you sign up for “full coverage” with an older car that they have the option to just “total” your car out, or in other words, because your car’s value is less then the cost it would take to repair it, they just write you a check for the value. Of course, how much the car is worth depends on who you ask. Insurance companies frequently want to value the car on the low side, but you have to especially watch out for the companies that point to pre-existing damage on the car and deduct that from the car’s value, thus decreasing the size of the check you get. It is not uncommon to find a person paying a lot more money every year for “full coverage” to only get a check for $500.00 when their otherwise dependable older car is totaled by some careless driver. These folks pay thousands more over the life of their car without getting any practical value.
What’s the alternative?
So what should you do if you have an older car but you still want protection against high medical bills in the event someone without insurance hits you? Explore the option of getting only “liability” insurance in addition to a higher limit on your medical payment coverage. This way, you can be guarded against high medical bills without spending extra money on the illusion of “full coverage.”