What You Should Know About Classic Car Insurance
Posted on Tue, Apr 06, 2010
More than half of all collector cars are insured by a standard insurance company versus a specialty program. Generally, the standard car insurance companies have higher rates for collector cars and the collector cars could be under-insured.
Types of classic car coverage
There are three types of automobile insurance available: Actual Cash Value (ACV), Stated Value, and Agreed Value. ACV coverage is the type that most standard cars are insured under and pays out a depreciated "book" value in the event of a claim: the older a car is on an ACV policy, the less value it has. Some insurance companies offer Stated Value policies for collectibles which lets you state a value to the car, allowing you to go over the depreciated value. But, Stated Value can still depreciate vehicles because the policies generally require the insurance company only to pay "up to" the "stated" amount. Plus, there are usually deductibles with Stated Value. Agreed Value insurance policies are the preferred choice for class cars since they guarantee you will get all of your money back in the event of a total loss. There is no depreciation of a car's value with an Agreed Value policy.
Hot rods and custom cars
Hot rods and custom cars can also be covered with collector car insurance companies. Since hot rods and custom cars are unique, they are more difficult to put a value on. This involves more work with the insurance companies who may want to see receipts and labor charges involved in building or restoring the car to assess the value.
Limitations
Some or all of the following limitations may apply:
Mileage Restrictions - Many specialty programs may limit owners to driving their vehicles to 2,500 per year or 250 miles per month. Some insurance companies may require yearly odometer readings.
Age Restrictions - Most collector car insurance companies require a driver to be at least 25 years old, and some 30. In some cases, a minimum of a 10 year driving record which is fairly clean is also required.
Garage Required - Most insurance policies also require the classic car to be garaged.
Usage Restrictions - Nearly all specialty programs do not allow classic cars to be used for daily transportation, racing or commercial transportation of goods or passengers.
Periodic coverage reviews
Restoration adds value to a car, so if you've recently or are in the process of restoring a car, you should look at increasing the coverage. In the last few years, classic cars have appreciated in value rapidly. Periodically review your coverage and make any necessary changes.
In summary
By insuring your car through a collector car insurance company versus a standard car insurance company, you could save up to 50% off of premiums. Plus, a standard car insurance company will likely not cover your classic car up to it's real value.