How to Pick the Right Car Insurance for Retirement

Posted by Pekin Insurance on Feb 04, 2020 in Auto

3 min read

Add auto coverage to your retirement to-do list.
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You know the feeling. You leave for vacation but can’t figure out what you forgot to pack.

It’s like preparing for retirement. You have to sort through debts, IRAs, 401(k)s, and … car insurance? Yes, your to-do list should include choosing the right car insurance.

Otherwise, you could throw money out the window or not have enough coverage when you need it. Let’s get started!

Retirement Numbers You Should Know

The following stats only apply to the U.S.: put together a visual for how much money you need to enjoy a comfortable retirement in each state, along with these eye-opening numbers:

  • Average yearly expenses for someone over age 65: $51,624
  • Average savings needed for retirement: $904,452

As you can see, it takes hard work, careful spending, and good decisions to build your nest egg.


Car Insurance, Your Nest Egg, and Liability Coverage

Retirement should inspire you to save money. You think about cutting cable, eating out less, and using the budget as a map instead of a compass.

You don’t want a car accident to affect your finances. Before you decide to lower your car insurance coverage, you should know more about how your liability limits work.

Liability coverage kicks in when you’re legally responsible for a car accident, and it includes two parts:

  • Bodily injury
  • Property damage

Bodily injury helps pay for legal fees, as well as the injured parties’ medical expenses and lost wages.

Property damage liability covers the cost of:

  • Vehicle repairs
  • Legal fees
  • Lost income
  • Repairs for buildings, mailboxes, fences, and more


Lower Limits, Higher Risk

What happens when you don't have enough car insurance? You pay for damages with your own money.

Take a look at these average hospital costs:

  • Per-day cost: $3,949
  • Total stay: $15,734

In 2010, the National Highway Traffic Safety Administration (NHTSA) estimated thathe average auto fatality costs an average of $1.4 million over a lifetime, and a critical injury from a car accident costs an average of $1 million over a lifetime.

The average new vehicle costs over $37,000. Vehicle repairs are nearly 61% more expensive than they were in 2000 thanks to new technology and rising parts expenses.

If you cause an accident that totals another driver’s new vehicle, lower limits probably won't cover all the damage and hospital bills.


Put Your Policy Limits Under the Umbrella

Liability limits are written like this: 25/50/20 or $25,000/$50,000/$20,000.

Here’s what those numbers represent: bodily injury liability per person/bodily injury per accident/property damage per accident.

If you cause an accident and carry the liability limits listed above, insurance will pay up to:

  • $25,000 if a single person is hurt (with some exclusions applying, depending on the policy)
  • $50,000 if more than one person is hurt
  • $20,000 for property damage

An umbrella policy offers liability coverage beyond your regular limits. It would add extra bodily injury and property damage coverage to your car insurance.


Better Ways to Save

Remember when we talked about looking for ways to save?

See if you qualify for Pekin Insurance auto discounts such as:

  • Auto/home
  • Multi-car
  • Paid-in-full
  • EFT
  • Defensive driver (not available in Indiana)

You can insure motorcycles and recreational vehicles on our auto policies, too!


Something Else for Your To-Do List

Find more retirement guidance with these Pekin Insurance blog posts:


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Talk to your local, licensed Pekin Insurance agent about the right car insurance for retirement.


Contact your local Pekin Insurance agent today!


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