What Does a Classic Car Insurance Cover?

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If you own a classic car, you know how much time, effort, and money it takes to keep it in good working condition. You don’t treat it like your typical set of wheels – you treat it with extra care to preserve its beauty. This should also apply to your classic car insurance.

Do You Need a Classic Car Insurance?

a classic toy car covered by human hands

It’s not just wise to get one – it’s necessary. You definitely need to ensure a classic car if you own one and occasionally drive one.

Definitely! In almost every state, you have to have at least basic auto insurance to drive any car, including your classic. New Hampshire and Virginia are different, but generally, it’s a must-have. Driving around without it? That could land you in trouble with fines or even impact your ability to get insurance later on.

Classic cars are often susceptible to specific risks, including the rarity of parts, specialized repair techniques, and their appeal to thieves due to their high value.

Plus, the emotional attachment you have with your vintage car adds another layer of significance to their protection. Therefore, classic car insurance is not just about financial reimbursement; it’s about preserving a piece of history and your personal joy.

How Does It Differ from Standard Vehicle Insurance?

Now, if you own a classic car, you can’t just go with the bare minimum insurance like regular cars. Most insurance companies will ask you to get more than just the basic liability coverage. Why? To make sure both you and your classic car are well covered.

Unlike standard auto insurance, classic car insurance comes with its own set of nuances and specifications. It’s because the two types of cars are valued differently. Standard policies often consider a car’s age, how much it’s been used, and how it’s depreciated over time to decide its value for insurance purposes. But here’s the thing – if your classic car has been restored or customized, it’s probably worth more than its depreciated value.

In fact, classic cars are insured based on their “agreed value” or “guaranteed value.” This value is agreed upon by the owner and the insurance company and reflects the true worth of the car, considering its collectibility, restoration quality, and market demand.

Furthermore, classic car insurance often offers more tailored coverage options that cater specifically to the needs of vintage vehicles. For instance, policies may include coverage for transport to shows or events and specialized road assistance tailored for classic cars. Additionally, these policies recognize that classic cars are typically driven less frequently, resulting in lower premiums compared to standard car insurance.

However, with these unique features also come specific eligibility criteria and usage restrictions. Classic car insurance policies may have stipulations regarding the car’s age, its condition, how and where it is stored, and how often and for what purposes it can be driven.

Is Your Car a Classic?

Now, before we discuss the nuances of classic car insurance, you need to know if your old car is truly a classic.

Different insurance companies and organizations have different answers on what a classic car is. The Classic Car Club of America (CCCA) says it’s a car made between 1915 and 1948. But many people think of ‘classic cars’ more broadly, including all sorts of older cars (vintage, antique, collectors), as long as they were produced more than 20 years ago.

Your insurance company probably won’t stick to the CCCA’s definition. Instead, they’ll have their own criteria for what counts as a classic, antique, or other special type of car. Take State Farm, for instance. They say:

  • A “Classic automobile” is ten or more years old, rare or historically interesting, and well-kept by enthusiasts.
  • An “Antique automobile” is at least 25 years old and preserved by antique car fans.
  • A “Replica” is a copy of an older classic or antique car. If it’s over 25 years old, it’s an antique.

Then there’s The Hartford’s take:

  • Their “Classic automobile” is 10+ years old but might be used more often and is worth more than others of the same make and model year.
  • Their “Antique automobile” is 25+ years old and mainly for shows, parades, and the like, with occasional other use.

And some insurers, like Hagerty, even include modified and newer cars, sometimes called “modern classics” or “future classics.”

In short, every insurance company has its way of defining a classic car and similar categories. It’s really important to chat with your insurance agent about your car to figure out the right coverage.

What are the Eligibility Requirements for a Classic Car Insurance?

When it comes to classic car insurance, different insurers have their own set of rules about what qualifies as a classic car. In general, here’s what they look for:

  • The car should be in good condition.
  • It should be at least 25 years old or 20 years old if it’s a collectible.
  • It’s not your everyday car – you’re not using it for your daily commute or regular trips.
  • It must not be used for racing
  • It must be stored in a fully enclosed or climate-controlled garage.
  • It must have an annual mileage of under 7,500 miles, though this number might change depending on your insurer.

Some insurers will cover brand-new flashy cars like Corvettes and Ferraris, too, as long as they meet all these criteria (except the age part, obviously).

The drivers themselves need to meet specific standards, too. To insure your classic car, you should:

  • Be at least 25 years old.
  • Have at least five years of experience driving.
  • Have a regular-use vehicle for daily driving.
  • Have a clean driving record. Some insurers only allow drivers who don’t have serious infractions, like reckless driving, alcohol-related offenses, and speed violations from the last three years.
  • Have no more than one at-fault accident or moving violation in the last three years.

And it’s more than just classic and collector cars that can get this kind of insurance. The list of vehicles eligible for classic car insurance covers quite a range.

What is Covered in a Classic Car Insurance?

a retro car tumbled down a lamppost

Classic car insurance offers the same types of coverage as standard car policies but with extras designed to cover the needs of classic cars.

Classic car insurance policies can vary, depending on the policies of the insurance company you choose and the type of classic car you have, but some of the most common types of coverage include:

1. Liability Coverage

This is a fundamental component of any auto insurance policy. It covers damages and injuries to others if the policyholder is at fault in an accident. Even though classic cars might be driven less, liability coverage is still essential.

Classic car insurance policies will at least cover the minimum liability required by your state. If you cause an accident, the policy helps pay for the other person’s medical expenses or part of their lost income if they can’t work. It even covers funeral costs in severe cases.

Liability coverage also includes legal defense if you’re sued post-accident.

2. Collision Coverage

Collision coverage pays for damage to the insured classic car resulting from a collision, regardless of who is at fault. This is important because the cost to repair a classic car can be significantly higher than a standard vehicle.

3. Comprehensive Coverage

This covers non-collision-related damages to the classic car, such as theft, vandalism, weather events, or other threats. Given the value and attractiveness of classic cars, comprehensive coverage is highly recommended.

4. Uninsured/Underinsured Motorist Coverage

This protects the policyholder if they are in an accident with a driver who does not have sufficient insurance to cover the damages.

5. Agreed Value Coverage

In case a classic car is totaled, the policyholder receives the car’s full agreed value as determined at the policy’s inception, without depreciation.

6. Other Coverage

Other optional coverages may include:

  • Roadside Assistance: Specialized roadside assistance is often included, tailored for classic cars. This might consist of flatbed towing and support at classic car events.
  • Spare Parts Coverage: Given the difficulty and expense of obtaining spare parts for classic cars, this coverage can be very valuable.
  • Travel and Car Show Expense Coverage: For those who travel to shows or exhibitions, this coverage can include travel interruption compensation and protection for the car while it is on display.
  • Cherished Salvage Coverage: If your classic car is totaled due to a problem covered by the policy, you can keep your classic car and still get paid by your insurer, minus the deductible.
  • Vehicle Under Construction Coverage: If you’re restoring your classic, this coverage can increase along with your restoration progress.
  • Automobilia Coverage: This is for collectible items linked to your car, like hood ornaments or vintage license plates.
  • Diminution in Value Coverage: After an accident, a rare car may lose value even if it is perfectly repaired. Diminution in value coverage compensates for this loss in value.
  • Legal Defense for Provenance Disputes: For vehicles with significant historical importance, legal disputes over ownership or authenticity can arise. Some policies may offer legal defense coverage for such situations.

What is Not Covered in a Classic Car Insurance?

Classic car insurance is pretty specific about what it doesn’t cover. Here’s the rundown:

  • Classic car insurance is for your secondary, not-so-often-driven car. Even if your car meets the criteria of a classic car, you won’t be covered if you’re using it for your daily commute. Many policies require you to have a primary vehicle for daily use before they cover your classic.
  • If you’re planning to hit the racetrack, don’t expect your classic car insurance to back you up. That’s a no-go area for coverage.
  • Also, most classic car insurance policies come with mileage limitations. Some insurance policies only allow classic cars to be driven at certain events like car shows, parades, and club events, but not much else. 
  • Some also have strict requirements as to where the car must be garaged. For example, you may be required to store the vehicle in a locked, enclosed garage or storage facility so it can be eligible for coverage.

How is a Classic Car Valued? 

1970 Chevrolet Monte Carlo Coupe

When it comes to insuring your classic car, it’s essential to know its value. This is where “agreed value” comes into play. It’s pretty simple: the agreed value is the amount that you and your insurance company decide your car is worth before your policy starts. 

This involves evaluating your vehicle, and you’ll get a chance to highlight any custom work, restoration, or modifications you’ve done. These details are essential because they’ll be included in the final valuation. If your car faces a total loss that’s covered, you’ll get this agreed value, just minus your deductible.

Now, how much does classic car insurance cost? Well, it varies, but these factors play a role:

  • Car’s Value: Your car’s make, age, and condition influences your insurance rate significantly.
  • Location and storage: Your location, as does where you keep your car, impacts the cost. A secure, locked garage or storage facility is seen favorably by insurers.
  • Usage: Classic car insurance isn’t for cars you drive every day. How often and where you drive your classic will affect your premium. Some insurers offer various coverage options for different mileage levels.

Also, don’t forget about discounts! You might snag a discount on your classic car insurance for things like bundling policies, insuring multiple classic cars, having a clean driving record, taking a defensive driving course, fitting an anti-theft device, or opting for comprehensive coverage.

Don’t know the value of your classic car? Don’t fret – there are ways to define it. In determining the value of a classic car for insurance, these are the standard methods used: 

  1. Professional Appraisal: One of the most reliable methods for determining the value of a classic car is to have it appraised by a professional. These experts have an in-depth understanding of the classic car market and can provide a detailed assessment considering factors like make, model, year, historical significance, rarity, restoration quality, and current market trends.
  2. Car Show Comparisons: Attending car shows or auctions can give an indication of how much similar vehicles are valued. This method can be subjective, as the value fluctuates based on demand and the specific audience of the event. Here are some tips to remember when attending a classic car auction.
  3. Classic Car Price Guides and Databases: There are several established price guides and online databases for classic cars that provide a range of values based on make, model, year, and condition. These guides are continually updated and can serve as a reference point.
  4. Online Forums and Car Clubs: Consulting with classic car clubs or online forums can be beneficial. Members of these groups often have a wealth of experience and can offer insights into the value of similar cars.
  5. Comparison with Recent Sales: Looking at recent sales of similar models in similar conditions can provide a realistic idea of the current market value.
  6. Condition and Restoration: A thorough examination of the car’s condition, including any restoration work done, is essential. Original parts, authentic restoration, and overall condition significantly impact the value.

What Factors Should You Consider When Taking Out Insurance for a Classic Car?

When you’re in the market for classic car insurance, there are several essential factors you should consider to ensure that your prized vehicle gets the protection it deserves. Here’s a quick guide:

1. Agreed Value vs. Actual Cash Value

Unlike regular cars, classic cars often appreciate in value. Make sure your policy is based on an agreed value (the car’s value agreed upon by you and the insurer), not the actual cash value, which factors in depreciation.

2. Usage Restrictions

Understand how often and for what purposes you can use your classic car under the policy. Most classic car insurance policies restrict the car’s use of activities like shows, parades, and occasional pleasure drives rather than daily commuting.

3. Mileage Limit

Check if there are annual mileage limits. Staying within these limits is usually a requirement for maintaining the policy.

4. Condition and Storage of the Vehicle

Your insurer will likely have conditions regarding how and where the classic car must be stored (usually in a secure, enclosed space like a garage) to minimize risk and maintain eligibility for coverage.

5. Special Coverage Options

Look for special coverage options pertinent to classic cars, like coverage for spare parts, restoration, and transport to shows or events.

6. Policy Exclusions

Be clear about what the policy does not cover. This can include things like wear and tear, mechanical breakdowns, or damage during racing.

7. Driver Eligibility and Driving History

As mentioned earlier, insurers may have age and driving history requirements for those who drive the classic car.

8. Roadside Assistance

Consider whether the policy offers specialized roadside assistance for classic cars, such as flatbed towing.

9. Insurance Company’s Reputation

Choose a company with a good reputation in insuring classic cars. They should understand the nuances of classic car valuation and care.

10. Discount Opportunities

Look for discounts like low mileage, multiple cars, or having a secure, monitored place to store your car.

11. Flexibility and Adjustability

Ensure that the policy is flexible enough to adjust to changes, such as an increase in the car’s value or modifications to the car.

12. Cost of Premium

While cost is an essential factor, it should be weighed against the coverage offered. Cheaper isn’t always better if it compromises on essential coverage.

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