The Ultimate Guide to Classic Car Insurance

So you’ve finally gotten your dream car. A classic Ford Mustang or a limited make Mercedes-Benz AMG Hammer is now sitting in your garage waiting to take a cruise down a forest-lined highway.

But before you rev up the engine, you’ve got to protect your new baby from the worst-case scenario. There is an average of 6 million car crashes in the US each year. And around 5 million of the estimated 273.7 million vehicles on the road are classic or collector cars. Reading these stats, it seems foolish not to get protection.

You wouldn’t drive your regular car without insurance now, would you?

With a regular car, you’d just add it to your regular old car insurance plan. But you’re not dealing with a regular car in this case. You’ll have to invest in a special insurance policy to go with your special car.

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That’s why many insurance companies offer specific classic car insurance plans.

If this is your first classic car, you might have a lot of questions. You might have no idea where to even start. Read our Ultimate Guide to become a classic car insurance pro.

What is Classic Car Insurance?

Classic car insurance is a specific policy that covers the total value of classic and collector’s vehicles. You could cover your classic car with a normal policy. But classic car insurance is different from a standard car insurance policy because it has certain coverages and benefits specific to classic car owners’ needs.

The main two features are that classic car insurance policies cover the car’s “agreed value,” and offer protections for some of the main activities of classic car owners; the exhibition, showing, and restoration of classic cars.

Benefits of Choosing Classic Car Insurance?

There is a long list of benefits in choosing classic car insurance over regular car insurance. Your classic, vintage, or collector’s vehicle is special and requires special protection.

However, classic car insurance’s main benefits over a regular policy are the lower premiums, agreed value coverage, and optional coverage options.

Classic car insurance offers lower premiums because of the perceived lower risk to insurance companies. This is due to the value of the car to the owners, who are expected to take better care in driving and maintenance.

Standard automobiles begin to depreciate the moment they leave the lot. Coverage payouts are based on the actual value of the car at the time. However, since classic cars appreciate, they are covered based on a predetermined and agreed-upon value.

If you compare standard auto insurance to classic car insurance, you’ll find many differences. Classic car insurance provides special coverage options not offered in standard policies.

What Are the Requirements for Classic Car Insurance?

To be eligible for classic car insurance, both you and your vehicle have to meet a few requirements.

The Car

To be eligible for classic car insurance, the car itself must be evaluated to be a “classic car.” It has less to do with age and more to do with the value of the car. By their most simple definition, classic cars are vehicles that appreciate and are mostly used for pleasure.

Outside of this definition, there are other qualifiers to determine if a vehicle can be classified as a classic car and be eligible for this type of insurance coverage.

Again, eligibility is not determined by age. But generally speaking, a car must be at least 25 years old and appreciating in value to be considered a classic. If it is newer than 25 years old, it must be rare or of limited production.

These younger cars must also be appreciating.

If a vehicle has been modified in a manner that adds value or is a replica of a classic car, it may be eligible for classic car insurance.

If you are unsure about your vehicle’s value, the best choice is to get it professionally appraised.

The Driver

As the driver and policyholder, you must also fulfill certain requirements that assure the insurance company that you’re a safe bet.

The driver must have a clean driving record with few or no previous claims. You may also be denied coverage for DUIs or multiple at-fault incidents.

You also typically need to be at least 25 years old and/or have 5-10 years of experienced driving.

What Does Classic Car Insurance Cover?

What is covered under classic car insurance varies from company to company, but most policies have similar standard coverage.

All policies include some variation of physical damage coverage. Your vehicle’s total agreed value will be covered in the event your car is damaged or totaled.

There is also liability coverage, which provides the minimum liability coverage required by your state if you are at fault for an accident that causes property damage/injury to the other party.

Classic car insurance also typically covers roadside assistance. Classic car owners are six times more likely to break down than have a claim. Therefore its extremely important that your policy includes guaranteed flatbed towing in the event of a breakdown, as flatbed is safer for your vehicle than standard towing.

Additionally, some classic car insurance plans may have add-on coverage options for some of the more specific needs of classic car owners:

• Memorabilia Contents Coverage: This covers any classics related memorabilia of value such as old license plates, dashboard accessories, hood ornaments, etc.
• Restoration Coverage: Coverage for when the car is being restored
• No Attendance Coverage: Coverage for when your car is being displayed without your presence
• Traveling Coverage: Some plans cover the cost of lodging, food, travel, etc., in the event that your car breaks down on the way to or from a car show.
• Spare Parts Coverage: This add-on will cover any spare parts you have on hand if they are stolen or destroyed.

How Much Does Classic Car Insurance Cost?

One of the biggest questions many classic car owners ask is, “how much does classic car insurance cost?” You’ve already spent a lot of money on the car itself, not to mention any possible repairs and restorations. It’s fair to be worried about how much you’ll have to spend now to protect that investment.

Classic car insurance policies are generally less expensive than typical auto insurance policies. The car is driven less and is typically kept in better condition. Classic car owners generally invest lots of time, money, and care into maintaining their vehicles.

This makes classic cars a lower risk than standard vehicles, leading to lower. Obviously, the policies vary by company, so you will need to get a quote on your vehicle to see what kind of rates you are eligible for.

Your driving record will definitely impact the cost of your classic car insurance.

How Can I Save on Classic Car Insurance?

Actually, classic car insurance is often much less expensive than insuring a standard vehicle. Generally, a classic car insurance policy might cost you less than one-third the price of standard automotive insurance.

However, you may be eligible for discounts in several circumstances. For example, you might get lower rates if you insure more than one classic vehicle at a time or have multiple policies with the same insurance carrier. So if the insurance carrier you use for your standard vehicle offers classic car insurance policies as well, you could save big bucks.

You also might be eligible for a deal if you have a clean driving record and complete a defensive driver’s course. If you have no previous accidents or claims in the past few years, you’ll get better rates. Additionally, if you install an antitheft device in your car, you can get your insurance rate at a discount.

If you plan on only restoring–and not driving– your classic car, you can spend less money by selecting what is called a “comprehensive-only” plan. It only includes coverage for if your vehicle is damaged or stolen due to non-collision related incidents.

FAQ

Here are the answers to some of the most frequently asked questions about classic car insurance.

What Is the Difference Between Agreed Value and Stated Value Insurance Coverage for My Classic Car?

Stated value insurance coverage is what is offered in most regular car insurance policies. This means that in the case of the total loss of your vehicle, the car will be worth the “actual cash value.”

The moment you drive off the lot, the car begins to depreciate in its “actual cash value.” So, the insurance payout will continue to decrease over time as it continues to depreciate.

This doesn’t work for classic cars, which appreciate in value over time. That’s why classic car insurance policies operate under agreed value. You and the insurer agree upon a fair evaluation of your car’s value, and it becomes the insurance payout in the event of a total loss.

The agreed value is usually determined by a mixture of factors. It’s usually based mostly upon a professional classic car appraisal and the car’s value as determined by Kelly Blue Book or similar valuation guides.

Will My Car Be Insured When It Is in a Repair or Restoration Shop?

Depending on the insurance provider, your car may be insured while in a repair or restoration shop. It is typically an add on to your typical classic car insurance policy and is called  “Vehicle Under Construction” coverage.

It covers your car during the duration of the restoration process while the car is not drivable. This is separate from the coverage for repairs necessitated by damage.

If you think that you will be restoring your vehicle, or it will need repairs unrelated to an accident, be sure to find a policy that covers this specifically.

Do You Need a Certified Car Appraisal to Insure My Classic Car?

Yes, you do need to get your car officially certified. This certification appraisal that your agreed value is based on, and it is what backs your insurance in the event of an accident.

Without this appraisal, it can be difficult to secure a fair insurance rate for your vehicle.

Are There Restrictions on When I Use My Car?

In many cases, there are restrictions on when and how you may use your classic car.

The car must be only used for pleasure driving or as a hobby. For example, you’re allowed to take your car for a spin around the city or drive it in parades and car shows. However, you cannot use it to drive to work and must prove you have another vehicle for that purpose. You also cannot race your car or drive it on racetracks.

Most policies have annual mileage limits meaning that you cannot drive more than a certain number of miles per year. The limit varies from company to company, but most policies have a cap of around 5,000 to 7,500 miles.

One of the benefits of classic car insurance through LoPriorie is that there are typically no mileage restrictions.

There are also rules to show that you are taking care to protect the vehicle from harm such as theft or damage. You must prove that you will be storing your car inside a secure garage or other types of storage facilities.

Insure Your Classic Car With Ease

So now you know how to get classic car insurance. You know how beneficial it is and how you might get a sweet bargain. All that’s left is to seal the deal and ensure that your baby is protected as it should be. There are plenty of great options out there, and you’ll be sure to find a policy that fits you. But, if you’re looking for a classic car insurance policy in Massachusetts, be sure to check out LoPriorie Insurance Agency for all of your needs. Contact us for more information!