Posted by & filed under Auto Insurance.

If you are a resident of Waterdown, Burlington, Hamilton or Flamborough who is looking for ways to save some money, and you happen to be driving an older vehicle, one of the monthly expenses that you may be considering eliminating is collision insurance. So, do you need – or should you have – collision insurance on an older car? It depends.

Here are some of the things you need to know:

What insurance am I required to have by law?

Ontario law does not require you to have collision insurance. It does, however, require you to have the following:

  • At least $200,000 in liability coverage.
  • Statutory accident benefits coverage.
  • Uninsured/underinsured coverage.
  • Direct compensation property damage insurance.

So, does that mean I am not required to have collision insurance for my older vehicle?

The Ontario Government does not require you to have collision insurance, but if you are leasing your vehicle, it may be a requirement of your lease agreement.

Before cancelling any insurance of your leased vehicle, read your agreement very carefully!

What if I own my car?

If you own your car, you are under no obligation to have collision insurance, but depending on your vehicle and your circumstances, it may still make sense to have it.

To help you decide on whether having collision insurance on your older vehicle makes sense for you, you need to ask yourself two questions: how much is your car worth after insurance costs, and what can you afford should you get into an accident?

What is your car worth after insurance costs?

When you apply for insurance, your insurance company will place a value on your car. Start with this value and then subtract your insurance premium and any deductible amount that you would be responsible for if you made a claim.

If you find that your car is not worth much after your insurance costs, then it may not make sense for you to pay for collision insurance.

What can you afford?

Now, before you go cancelling your collision insurance because your car is not worth much, you still have to ask yourself another very important question. What would happen if you were in an accident and your car was a total loss? Are you in a position where you would be able to replace your vehicle without the money you would get from an insurance claim? If you are, then saving some money on non-mandatory insurance like collision might actually make a lot of sense.

But what if replacing your vehicle out of pocket isn’t feasible for you? In that case – even though your older vehicle may be technically over-insured, it might make more sense for you to keep your collision insurance. This way, you will have the security of knowing that you’ll have money to repair or replace your vehicle in the event of an accident.

At Waterdown Collision, we work directly with insurance companies to process claims for you. We proudly service customers from the Waterdown, Hamilton, Burlington, and Flamborough areas. Contact us today for your collision repair needs.

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