Insuring Your Classic Car

To many people, classic cars represent the best, most aesthetically pleasing products in the automotive world. Aside from the many benefits this offers to the classic car owner, such as being able to show off a faithfully and painstakingly restored beauty, there are a few issues the owner needs to deal with. Classic cars are very attractive to thieves, because unlike most cars, will tend to increase in value over time, so they always offer the ability to be resold. Also, getting adequate insurance for a classic is not as straightforward as for a modern car. The big name insurance companies typically do not offer “off-the-shelf” insurance products for classic cars. However, it goes without saying that insurance is required, not just from a personal economic perspective, but is also law in many states.

Insurance for your classic car is available, but will take some research to find. A few companies like Hagerty, Leland West, and Norwich Union specialize in these products, so that is a good starting point.  Unlike conventional auto insurance, in which you typically don’t negotiate the maximum amount the insurance company will pay you in the event of a total loss, with classic car coverage, you need to come to an agreement with your insurance company on a specific amount they will cover. This amount can vary widely from car to car, depending on how much work has gone into it.

The type of insurance policy described above is called an agreed value policy, in which the agreed value is the maximum amount the insurance company will pay in the event of a total loss.  They will then give you a premium quote based on the agreed value. The good news is that cost of classic car insurance is typically lower than convention auto insurance because of the low rate of claims made. This is likely due to the extraordinarily high level of care given to these cars both on the road and in the garage. However, not everyone will be eligible for this type of policy. Typically the following restrictions apply:

• Age Requirement:  many antique and classic car policies require that the driver be of a certain age in order to ensure that he or she has sufficient driving experience and is not in jeopardy of causing an accident.  This makes this type of insurance particularly difficult for young and new drivers to obtain.

• Age of the Vehicle Requirement:  many of these policies have imposed a minimum age limit for your vehicle to be considered an antique.  Typically, the limit is 15 years old.  So if your car is less than 15 years old it may be difficult to get antique car insurance. 

• Usage Requirement:  there are strict limits on how your classic or antique car can be used.  For example, you must have a garage or some other form of protective storage where the vehicle can be parked.  Nor can the car be used for business purposes.  And finally, there is a limit placed on the number of miles you can put on your car either monthly or yearly.  Going over this mileage limit can put you at risk of losing your car’s coverage.  Therefore, you must also be able to prove that you own another vehicle which is used for normal driving purposes .

Despite these restrictions, specialized classic car insurance is definitely the best option for your classic car. It is an insurance product designed for the classic car owner, so it should do what you need it to. Although it is theoretically possible to get a conventional policy on a classic car, it will typically have much higher premiums, and not cover nearly as much as you need it to in the event of a total loss.

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