NEW YORK (MainStreet) — In warm, sunny, retirement landscapes from Phoenix to Fort Myers, retirees are putting the pedal to the medal on so-called “low-speed vehicles” — more formally known as golf carts.
But these aren’t your grandfather’s golf carts. The new breed of retirement community roadster can go up to 25 miles per hour, and owners are as likely to use them to hit Target or Denny’s as they are to ride the local links.
These souped-up golf carts aren’t cheap. According to the Orlando Sentinel, they can go for as high as $9,000, and new regulations on low-speed vehicles have insurance rates are climbing to about $600 per year.
So what’s a white-haired road warrior with a need for speed to do about rising golf cart costs, especially those exorbitant insurance rates?
We tapped a few financial experts to examine the landscape and offer some tips on what retirees can do about the financial management side of the go-go golf cart equation.
First up, Howard Mills, director and chief adviser of the Insurance Industry Group of Deloitte, who says golf cart owners need to do some due diligence.
“As with any insurance policy, read the contract,” he says. “Know your needs and work with your insurance professional to make sure you have the proper coverage.”
Mills adds that owners should know the rules of the road before they buy a golf cart.
“The standard homeowners policy covers golf carts that have not been modified to go faster than 25 miles per hour in certain circumstances,” he says. “The carts need to be parked and used on a golf course (or crossing the road to park or while playing golf) or at home, including private residential communities, for coverage to be in effect.”
There are different ways to insure a golf cart. “One of the most convenient may be to add a rider to the homeowners policy in states where this is available. Another option is to get a dedicated golf cart insurance policy,” he says.