Should you buy insurance 'extras'?
If you drive an older car, it's probably OK to cut a few corners when it comes to buying car insurance. The key is to know where to scrimp. Insurance extras, such as rental-car reimbursement or tow coverage, aren't necessities -- especially if you have friends or family nearby who would be willing to give you a lift to work if your vehicle is unavailable because of an accident or repairs.
There is some coverage, however, that you shouldn't skip. Glass protection can save you hundreds of dollars (and you'll pay just pennies on the dollar for it): If a rock from a passing truck chips your windshield, you can simply have it repaired -- often for free -- if you opted for glass coverage. Without this protection, you'll pay for windshield and window repair and replacement out-of-pocket in an amount at least equal to any deductible your plan carries.
Although not legally required and not available in all states, it may be a good idea to carry personal injury protection, which can pay your medical bills in case of a car accident.
This coverage typically covers 80 percent of medical payments up to $10,000, capped at $8,000, and can be supplemented by a medical payment rider of $2,000 to make up for the shortfall. However, when selecting a level of coverage, you should factor in the quality of your personal health insurance policy. In some instances, your personal health insurance will be sufficient and you won't need this extra coverage, Schrage says.
As you're shopping for insurance for your older car, compare rates between providers and ask if there are additional discounts for bundling your insurance services. "Consider adding a homeowner's or life insurance policy with your provider to get an additional 10 to 20 percent discount on your insurance premiums," Schrage says.
Importantly, don't let your policy lapse. It could be illegal, and you could be charged with a crime if you get pulled over by the police for any reason. Plus, if you apply for auto insurance without an existing policy, you'll pay higher premiums.