Owning a classic car can be a fun hobby. It is estimated that there are actually more than 6 million individuals in the U.S. alone who are classic car collectors - and more than 25 million who are classic car enthusiasts. Therefore, there is a large market for those who are both interested in - and who own - this type of vehicle.
Owners of antique and classic cars have specialized insurance needs. Typically, these vehicles cannot be covered under regular auto insurance policies. In most cases, classic cars are not out on the roads on an "everyday" basis, but rather they are only used for limited pleasure driving, and / or for going to car shows and club related events. Therefore, for those who own such vehicles, it may be somewhat more difficult to obtain auto insurance quotes. In limited cases, these individuals may be able to obtain coverage from their current auto insurance carrier. However, there are other situations where the classic car will need to be insured via a specialty vehicle insurer.
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How Does Classic Car Insurance Work?
When going about insuring a classic car, it is first necessary to determine the definition of what exactly a classic car is in the eyes of the insurance company. This definition may vary from one insurer to another, however, according to the Classic Car Club of America, a classic car is defined as follows:
"American or foreign-built, produced between 1925 and 1948. They were generally built in limited quantities and were expensive when new. Classic and antique cars are those manufactured 30 or more years ago."
Because those who own a classic car will oftentimes treat the vehicle with much love and devotion, they want to be sure that the car is more than adequately insured should anything ever happen to it.
In addition to seeing the vehicle as a collector piece or an investment, owners of classic cars will oftentimes also have an emotional attachment to the item as well. This is usually not the case with regular cars such as a family sedan or car that is used for business.
Therefore, it is highly important to a classic car owner that coverage be perfect for any type of restoring, replacing, or repairing that would need to be done in the case of damage, vandalism, or theft.
Because of their differences from "regular" vehicles, classic car insurance policies will also differ a great deal from standard auto policies. This is especially the case when it comes to how losses are settled following an accident or a theft.
In most cases, auto insurance companies will value a standard vehicle based on its actual cash value. This will take depreciation into account. With a collector car insurance policy, however, the plan is typically written on an agreed value. This means that the car owner will be paid the full value of the vehicle if it is lost or stolen. The car's agreed value will also apply to physical damage that may occur to the vehicle such as fire or vandalism.
How Much Does Classic Car Insurance Cost?
The cost of insurance for a classic car will vary based on several factors. These include the vehicle's age, type, and value. In many cases, classic car insurance will cost less than insuring a regular, standard vehicle.
One reason for this is because these cars are not typically used on an everyday basis, and so are therefore not exposed to regular risk of accident. On average, the cost to insure a classic car will cost anywhere from one-third to one-half that of auto insurance for a standard vehicle.
Although classic car insurance is typically less than standard auto insurance, it is important to note that these policies will usually come with certain restrictions. Some of these may include the following:
- Limitations on how many miles may be driven annually
- Rules on how the car must be stored (typically in a secure garage)
- Restrictions on who is allowed to drive the vehicle
Considerations When Choosing a Classic Car Insurance Policy:
When shopping for classic car insurance, it is a good idea to compare several different policies prior to making a final decision. Just as with regular auto insurance, premium prices may vary a great deal - even for similar coverage options.
Some important questions to ask prior to moving forward with a policy should include:
- Will the vehicle qualify for coverage as a "classic car?"
- It this policy "actual cash value" or "agreed value?"
- Should I hire an appraiser in order to determine the value of the car?
- Does the insurance company need to approve the appraiser I hire (if applicable)?
- How often can the vehicle be driven?
- How must the vehicle be stored?
- Are there any situations in which a claim may be denied?
- What is the limit for comprehensive coverage?
- What are the limits on liability coverage?
- Do I qualify for any type of premium discounts?
Once you have obtained answers to all of these questions, and you have received several premium quotes, you can then move forward with making a decision on the best classic car insurance policy for your specific needs.