Classic Car Insurance is a must for all classic car owners. Recent statistics show that more than half of all classic cars are insured by a standard insurance company and not a collector car insurance plan, leaving your car at risk.
Recent statistics show that more than half of all classic cars are insured by a standard insurance company, which may not be the best choice. Many classic car owners think they will get a good deal from their current car insurance company since they already have one or more cars insured through them, but this is not usually the case. Generally the standard car insurance company does not have the best insurance price for collector cars, and your classic car could be substantially under insured since these insurance companies and their agents are not specifically classic car insurers.
Three choices of classic car insurance coverage There are three types of auto insurance available, and two of the three work for classic cars. The first available insurance type is ACV, or Actual Cash Value. THIS SHOULD NOT BE USED UNDER ANY CIRCUMSTANCE that I can think of. This is the plan that standard cars are insured under, and not designed for classic or collector cars. Under this plan, your car is insured for it's depreciated book value, or determined by what you paid for the car, and not it's collector or classic car value. An example would be if you bought a 1969 Pontiac GTO in 1976 for $3000. If the car was totaled, an ACV package would pay you $3000, not the actual value of the classic car, which would probably be 20 times as much in this case. It may not even be $3000 due to depreciation. Most standard insurance companies may try to get you on this plan if they do not offer the next two types. Move along, even if they are the insurance company for your current daily transportation vehicle(s).
Only the Stated Value and Agreed Value terms of service should be considered. The Stated Value insurance lets you state a value to the car, allowing you to go over the depreciated value. However, the stated value option does leave room for your car to depreciate, and the fine print will show that you may still not be fully insured for the exact stated amount. There are also deductibles usually with a stated value. The Agreed Value is the preferred choice of insurance for classic car owners. Under these plans, your classic car is covered 100% up to the agreed upon value of the car, and there are usually no deductibles. Your car does not depreciate under this option either, making it the best choice for insuring your classic car.
Hot rods and custom cars Hot rods and custom cars can also be covered with these specialty collector car insurance companies. It may involve more work with the insurance companies, and you will want to have all your documentation prepared before talking to them. Hot rods and other custom cars are tougher to put a value on due to their uniqueness. Insurance agents will want to see most receipts and labor charges involved in building or restoring the car, to assess the value. Specialty collector car insurance companies also understand details about collector cars. The insurance agents will add extra value to models that were built by famous or well known builders, and add value to models with original parts or rare options.
Classic Car Insurance Limitations With the agreed value insurance options, usually some or all of the following items are listed on the policy.
-Mileage restrictions; Generally there are monthly or yearly mileage restrictions put on the policy. Average restrictions are either 250 miles a month, or 2500 miles a year. Some insurance companies require yearly odometer readings. If this is a concern for you, it is possible to find packages that do not include these restrictions.
-Age restrictions; Most collector car insurance policies require the driver to be 25 years old, and some 30. Sometimes a minimum of a 10 year driving record that is fairly clean is also required.
-Garage required; Most insurance policies also require the classic car to be garaged. Hopefully this is not an issue with anyone. I can’t imagine having an $80,000 beautifully restored classic, and it sits in your driveway.
-Extra vehicles; Nearly all policies require you to prove you have another vehicle for daily transportation, and some policies even require one vehicle per driver in the household. You are generally not allowed to use the collector car for daily transportation or racing.
How to put a value on a classic car Insurance companies want to properly insure the value of their covered vehicles, so they may do a lot of research to get to the appropriate value. Classic cars that are still nearly stock with the original parts, are easier to put a value on since there are guides and other book price listings on these. Once you get into restored or hot rods, it becomes more work. Insurance companies will look into the amount spent to restore or build the car, what type of parts were used, and the amount of labor involved. Keeping detailed lists of work done and all receipts, including labor costs, is very important to get every penny your classic car is really worth. Certified appraisals can also be helpful, but not always necessary, especially if you have all the documentation and receipts. Keeping updated photos of your classic car is also a good idea.
Saving Opportunities Since the premiums are usually so low on classic cars, most insurance companies do not let you ‘drop’ or lower your insurance coverage, such as putting “theft, fire, or vandalism” during the winter months when it will not be driven. If your classic car is being restored and it’s up on blocks with the engine out, you should be able to negotiate something with your insurance agent. Another opportunity with classic car insurance companies is that many will allow you to have multiple cars for the same premium. The more classic cars you have, the premium stays the same. They see it as you can only drive one classic car at a time!
Periodic Reviews of Coverage You should periodically review your coverage and make any necessary adjustments. Restoration adds value to a car, so if you have recently or are in the process of restoring a car, you should look at raising the coverage. Also, classic cars are appreciating in value rapidly, especially over the last few years. Make sure your coverage is adequate.
Summary In summary, if you learn one thing from this article, it is to look into auto insurance from a collector car insurance company, and not from just your current standard insurance company. You can compare, but more than likely you will save up to 50% off of premiums with a collector car insurance company, PLUS your standard insurance company will likely not cover your classic car up to it’s real value. Only a collector car insurance company will give you lower premiums, and insure your classic car for what it’s really worth.