Insurance for your car, truck or SUV is important and the requirements for coverage can often vary from state to state. Understanding what is required for your vehicle and in your area is important. You need to be sure that you have the coverage you need and meet the requirements of the law in your area.
There just is not one universal coverage amount that you need when it comes to insuring your car, truck, or SUV. The value of the car, the amount of driving you do, your driving record, and even your age and marital status come into play when the insurance company rates you. There may be some minimum requirements for your state that you have to meet, but even that can vary with the area of the state you live and drive in. In order to know what is required of you, call the state Department of Transportation (DOT) and ask them for more information or talk to your insurance agent about the rules for your area. They should understand the rule and be very clear on what you have to have for coverage.
New Versus Old
The age of your car can play a large part in the cost to insure it. The value of the car has most likely dropped over the years unless it is a collector's item which is a completely different situation. For the average older car, without financing or a lean of some kind attached to it, the amount of coverage is most likely very low. In some cases, they will not even issue a policy that pays for replacement of the car because there is no way to do it fairly. On the other hand, if you are driving a new car, be prepared to pay a hefty amount premium to cover the car. The difference is in the value of the vehicle itself and if the insurance company has to cover the cost if it is stolen, damaged, or destroyed in some way. Since many new cars are financed through a lender, the insurance company will have to guarantee payment for the car if it is damaged or the lender may lose their money.
Specialty or Collector Cars
Most collector's items or rare cars need to be insured through an insurance company that understands the value of the car. They will most likely come out and look at the car, determine its value, then write the policy as a custom package for you. Don't expect the premium to be cheap and be sure to understand what the company will cover before you sign off on the insurance. The last thing you need is insurance that does not cover the car properly or one that leaves you with a large bill due to limited coverage if you have to use it. Don't be afraid to ask a specific question for any insurance you are buying and if the answers are vague, you may want to consider a different company for your auto insurance needs.