If you own an antique car or classic truck, you need a classic car insurance policy. Vintage cars are an investment and have unique insurance coverage needs and claim status. You need the right classic auto insurance to repair or replace the car in the event of an auto claim. A classic car insurance policy recognizes the value and rarity of your vehicle and the distinctive insurance coverage needs.
How Classic Car Insurance Works
classic car collectors
A standard classic automobile insurance policy issued by an independent agent of a typical independent insurance agency covers the "Actual Cash Value" (ACV) of the vehicle. You will only receive the original cost minus the amount of depreciation of your current vehicle. Since, the ACV of your vehicle depreciates yearly, Insurance policies will not pay the full price of your collector vehicle, even if that vehicle is totaled, thanks to depreciation.
Classic car insurance coverage, however, operates under a different assumption of value. Rather than depreciating the vehicle on a fixed schedule and calling that its value, the actual market value of the vehicle is considered with respect to paying for your loss. You and the insurer set an agreed value for your antique car, which matches its true current market value. If the vehicle is totaled, you receive the agreed-upon amount. The value paid out is calculated using classic car price guides, the rarity of the vehicle, auction results and other sources. Some insurers require an appraisal at your expense, while others do not.
Classic insurance should be re-evaluated periodically. Usually this is done every year at policy renewal but in special cases where values are increasing strongly you may want to do it every few months. Classic autos and specialized collectibles, including sports cars, race cars, hot rods, muscle cars and motorcycles are likely to experience an increase in value. You will want to work with the insurer to raise the value of your policy if you believe there has been car appreciation (or in leaner years, to lower the value if it has decreased to save yourself some insurance premium dollars)
There are many important reasons to opt for a specialized classic car insurance policy over a standard auto insurance policy.
Because your classic car isn't driven as often and is secure from the elements, when stored, the risk of theft, damage, or an accident is lower and so are your premiums.
Classic car insurance allows you to cover your vehicle for an amount that you and your insurer agree upon. You won't need to fight with an insurance company about your car's actual value in case of an accident or damage.
Your classic car may very well appreciate in value over time, unlike most cars which depreciate rapidly. By setting an Agreed Value, you can factor in appreciation over time.
Spare parts can be expensive -- especially for classic and vintage cars. Your specialized policy can provide $2,000 or more in spare parts coverage for lost or stolen parts.
There are certain eligibility requirements to meet before purchasing a classic or vintage car insurance policy:
● Drivers must have 9+ years of driving experience and a good driving record. Everyone who will drive the vehicle must be reported on the policy.
● Every licensed driver in the household must have a separate, insured, and acceptable vehicle available for their exclusive regular use.
● The classic, antique, or exotic vehicles covered may only be used on a limited basis for pleasure and not used for errands, daily activities, or commuting (except with a separate Occasional Commuting Endorsement)
● The vehicle will be kept in a locked, fully enclosed garage at home. In some high-risk scenarios, a transmitter alarm may be needed.
A classic car policy doesn't necessarily require that your car is “officially” a classic; it's a broad term that can refer to a wide range of antique, exotic, and classic cars with insurance needs beyond basic auto insurance policies!
A classic car can include:
● Exotic cars, including late models
● Muscle cars
● Antique cars
● Sports cars
● Hot rods
● Collectible, classic, and rare cars
If you aren't sure if your car is eligible for a classic car policy, give us a call!
Certain vehicles cannot be insured with a classic car policy. That includes vehicles that are used off-road or for camping, lifted vehicles, and cars fitted with "skinny" low aspect-ratio wheels unless they are original equipment.
A traditional insurance policy is designed to cover a vehicle that's used for primary transportation, but classic car coverage is different. With most policies for a classic or vintage car, there's an expectation that the car will be used on a limited, pleasure-only basis.
Many classic car insurance policies have a mileage limit, or a maximum number of miles you can drive the car per year. This varies by state and insurance company. In some cases, an annual odometer reading is necessary. Some policies do offer unlimited mileage. Another option is a Mileage Rollover. If you pick an optional annual mileage limit, and then drive less than that limit, your unused miles roll over to your next policy year.
The cost for classic car coverage depends on many factors, including your coverage amount, coverage terms, driving record, geographic area, and the vehicle itself. However, classic car insurance premiums are often more affordable than comparable coverage limits with standard auto insurance. Why? Because insurance companies specializing in classic, vintage, and exotic cars understand that the risk of a covered incident is much lower with vehicles that are only driven occasionally, very well cared for, and kept safe in a locked garage.
Protect Your Investment
If you have a classic car, make certain you have the correct antique auto insurance for it. If you don't and the vehicle is damaged, you may find that your insurance doesn't cover what you have invested.