Many car enthusiasts put a lot of time and money into their classic cars. They may need specialized protection that differs from standard auto policies.
Unlike modern vehicles that start depreciating immediately, classic, vintage, and antique cars often appreciate in value. Look for a policy that accounts for this appreciation in the maximum payment for a total loss claim.
Coverage Options
Classic car insurance is similar to traditional auto policies in that they both contain liability coverage, but they typically come with additional protections like roadside assistance and spare parts coverage. In addition, many providers offer restoration coverage and appraisal services to determine a vehicle’s value. Some providers use the replacement cost method, which calculates a car’s value by looking at what it would cost to replace the vehicle with a similar model in good condition. Others use the agreed-upon value method, which is determined by the car owner and insurer after an evaluation of the vehicle. This valuation may be based on the amount paid for the vehicle, the cost of any restoration or upgrades, and comparative vehicle prices. It’s important for car owners to understand how their vehicle’s value is determined because it will affect their policy and what they are able to get in the event of a total loss.
In comparison to typical auto insurance, classic car policies also tend to include a lower annual mileage limit. This is because collector cars are usually only driven to parades, car shows, and other pleasure events rather than being used as daily commuting vehicles. Some companies even offer lay-up discounts for storing the vehicle away during the months that it’s not in use.
Since these types of vehicles are often expensive to repair, some companies provide spare parts coverage in case the car is damaged. This can be particularly helpful for vintage cars requiring specialty, hard-to-find, or expensive parts. Additionally, classic cars that are being stored for long periods of time can be protected by storage coverage. This protection pays to store the vehicle in a secure and fully enclosed facility like a garage or a private storage unit.
Some providers also offer automobilia coverage, which compensates for personal automobile collectibles stored in the vehicle, such as automotive literature like old catalogs and guides, hood ornaments, gas pump or station displays, and vintage license plates. This coverage isn’t offered by every provider, but it can be a valuable addition to a classic car insurance policy.
Appraisal Value
Classic car insurance policies tend to offer lower premiums than standard auto policies. Part of this is because most classic cars do not depreciate as much as everyday vehicles do. In fact, many collectible vehicles may actually increase in value over time. Because of this, collector vehicle policies typically include an agreed-upon value for the car that you and your insurer agree on before you get a policy. This value will be listed in your policy and will not change unless you change it. This differs from traditional policies that determine a replacement cost or total loss claim amount using an appraisal.
The insurer will consider the type of vehicle, its condition, and any modifications you’ve made when determining this value. In addition, most classic car insurers will ask for proof that you’ve maintained the integrity of your vehicle. This includes submitting photos of your car and any restoration or modifications you’ve made. This will help ensure that in the event of a total loss, you can receive the full value of your car.
Insurers may also require that you store your car in a secure, enclosed space. This can often be a garage at home or a private storage unit. In addition, some policies will have mileage limitations and other restrictions on how frequently you can drive your car. This is because the less you drive, the lower your risk of a collision or other damage.
Some classic car policies will also cover spare parts and other automotive collectibles you may have. This is known as automobilia coverage and can provide coverage for items like vintage automobile literature, hood ornaments, and gas pump or station displays. It can even extend to model cars, toys, and other memorabilia that are stored in your home.
In the event that your classic car is damaged and in need of repair, most policies will pay for professional towing and specialized transportation of your vehicle. This is a key feature because most restoration shops and other auto body specialists are highly experienced in working on antique and classic vehicles.
Depreciation of Value
The newer car you drive to and from work sees more action than the immaculate 1950s Ford Thunderbird that sits idly in your garage. As a result, automobiles need different coverage to reflect their roles. You may want to consider a classic car policy for the former and a standard auto insurance policy for the latter.
A standard auto policy typically covers vehicles based on their actual cash value, which takes into account depreciation and age. A classic car policy, however, ensures your vehicle based on an agreed-upon value – after an appraisal and discussion with the insurer – so you can rest assured that your classic car will get covered if it’s stolen or destroyed.
In order to qualify as a classic car, your vehicle must be at least 25 years old and of historic interest or significance. Some classic car insurance companies also offer spare parts coverage. This will pay to replace or repair parts for your classic car that is necessary because you’ve used them, such as the brake master cylinder, brake shoes, and drums, or the exhaust manifold.
As you shop around for a classic car policy, be sure to ask about discounts. Some insurers offer discounts for insuring more than one classic car, while others will allow you to cover both your collector car and your everyday ride under a single policy. Several providers also provide the option to add a higher deductible in exchange for a lower premium, so you can choose what’s right for your budget.
You should also ask about a policy with a mileage limit, as most classic car policies require that your vehicles not be driven daily. If you use your classic car for parades, car shows, or weekend pleasure driving, then a mileage limitation may be more appropriate than an unlimited mileage policy.
Other considerations for a classic car policy include restoration coverage, which pays to restore your vehicle to its original condition and can be especially helpful for owners who have spent their own time restoring the vehicle. Also, some insurers require that your classic car be stored in a locked, enclosed, and secure garage to keep it safe from theft or damage.
Coverage Requirements
If you have a classic car, then you want to ensure it is protected. While regular auto insurance policies may provide liability coverage, classic car policies often include additional coverage options like roadside assistance, spare parts coverage, and restoration protection. Additionally, many classic car policies have agreed value, meaning that you and your insurer agree on an initial value for the vehicle based on the age, condition, and modifications of the automobile. This value will then be guaranteed for the duration of the policy, regardless of whether it appreciates or depreciates in value. The insurance provider may also require a professional appraisal in order to determine and update this value. This will be especially important when the vehicle undergoes major restoration or modification.
Unlike regular vehicles, which start losing their value as soon as they leave the dealership, classic cars tend to appreciate in value over time. As a result, you will likely find that your premiums increase periodically, reflecting this appreciation. To keep your rates low, limiting your mileage and storing your vehicle in a secure garage when it isn’t being driven is important.
Some classic car insurers offer limited-use policies that allow you to use your vehicle for club functions, exhibitions, organized meets, tours, and other events. However, this policy type is typically unsuitable for commuting or everyday driving. In fact, most insurance providers will require that you own a primary vehicle for daily transportation in addition to your classic car.
In addition to these requirements, some insurance providers will also ask that you limit your use of the vehicle and will include a mileage cap in your policy. Most providers will also require that your vehicle be stored in a private, enclosed, and secure storage location, such as a locked garage, pole barn, or storage unit, to protect it from the elements and other threats, like vandalism.
Depending on the insurer, standard classic car policies will often exclude vehicles that are more than 25 years old and in poor condition, as well as those with serious offenses on their driving records. In addition, some insurance companies will not insure classic cars that are used for racing or off-road driving.
