Whether you drive your classic car or use it exclusively for car shows, classic car insurance is necessary. Many classic car owners go without insurance or purchase standard auto insurance because they think classic coverage is too expensive or not needed. Going without the right insurance could actually cost you your investment.
Especially in the spring, there is increased liability with car shows and moving your vehicle. There are many people coming and going at car shows, and it is quite common for some minor bumps and scratches to occur. There is also the transportation of your vehicle to and from the car show — either by driving or being towed in a trailer – adding the risk of an accident.
When it comes to classic car repair, even minor bumps and scratches can be expensive to fix without insurance. Having the right coverage on your classic car can help pay for any repairs.
Before you seek coverage, it’s important to get a handle on defining your type of car.
Antique – Generally speaking, if a car is more than 25 years old, it is considered an antique. Some states, however, call a car “antique” if it is at least 20 years old, while the Antique Automobile Club of America says a car must be a minimum of 45 years old. The condition of the car is also what qualifies it as an antique. A car that is an antique has usually been restored, is well taken care of, and has some re-sale value.
Classic – Typically, companies call a car “classic” if it is 19 to 24 years old, has been restored, drives well, and is worth more than other vehicles of the same make and model year. In some circles, the words “antique” and “classic” are interchangeable, whereas in others, the word “classic” means a car that is 50 years old or more. Some classic car insurance companies say a classic car can be just over 10 years old, whereas if your car was made between 1925 and 1948, The Classic Car Club of America considers yours a classic.
Vintage – If your car was built between 1919 and 1930, it is likely a “vintage” vehicle, but an insurance company may consider it “antique” or “classic” instead.
Collector – A collector car is typically one built in 1980 or later, but sometimes companies call all classic cars “collectors.”
No matter which way you slice these terms, be sure to ask your insurance agent how your insurance carrier would define your vehicle. Though many carriers use “classic car insurance” as an umbrella term for antique, classic, vintage, and collector cars, it’s still important to differentiate which type your vehicle is to ensure you’re getting the quality coverage you need. And just because a car is old doesn’t mean it should be considered a ”classic.” Insuring an old car is not the same as insuring a car that fits into the above.
Even if you don’t drive your vehicle, it’s imperative that you get car insurance. When an accident or theft happens, you could lose the investment you put into your uninsured classic car. Whether you have always owned your classic car, just purchased one, or have restored one, having insurance coverage will help preserve its value.
To obtain proper coverage, insurance carriers require a certified appraisal on a classic vehicle. Upon receiving the appraisal, you then present it to your insurance company to determine replacement cost and appropriate coverage limits. Having the appraisal documentation available also becomes key during the claims process. Having your appraisal will help cement your claim and get the money you deserve during the claims process. Without a certified appraisal, you will not get enough to repair or replace the car adequately. If you make any additions or adjustments to your vehicle, you should have the car appraised accordingly and let your insurance company know immediately. Keep a record of all receipts and communications regarding the vehicle.
Some people think that going with their current carrier is a good idea because of the multi-car discounts it offers – but that’s not always the best choice. A typical car insurance company and auto policy will not take into consideration the restored value of the vehicle. They only take into consideration what you paid for the vehicle or the actual cash value. Since the value of these types of vehicle increase with time instead of depreciating, actual cash value will not be enough.
For example, if you paid $8,000 for a car and restored it to mint condition, that vehicle could now be worth five times your initial investment. Under an actual cash value policy, you would only be covered up to $8,000 in the event of a loss.
If you are thinking about skimping on insurance because you only drive your vehicle to and from car cruise events, think again. Car cruise events are often crowded with a lot of vehicles in the mix. It is one of the most likely places to receive a fender bender or worse.
Don’t jeopardize the value of your car just to save a few bucks. If you are going to spend the money to make a vehicle into a true antique or classic car, spend the money to protect your investment.
Coverage for collectible vehicles typically costs around one third of what you might pay for regular auto insurance. This is because collectible vehicles are driven fewer miles every year, and are likely kept sheltered and in good condition.
Not all insurance companies have qualifiers for being able to insure through their specialty car program, but some do. Here are some general requirements:
Insurance companies dealing with antique or collectible cars do typically have stipulations as to whom they will give a policy. These stipulations often include:
Always read your policy carefully. Some classic car policies treat your car like a decoration rather than a vehicle, restricting how many miles you can drive per month or per year. If you plan on driving your classic car, look for a policy with a higher mileage limit or no mileage limit at all. Work with your insurance agent to determine if the coverage you are getting (or currently have) is appropriate for your classic car and use.
As a Personal Insurance Consultant, Scott helps clients meet their personal insurance goals by thoroughly reviewing their current risk exposures and advising them on gaps in coverage.
As a Personal Insurance Consultant, Scott helps clients meet their personal insurance goals by thoroughly reviewing their current risk exposures and advising them on gaps in coverage. Once these potential short falls in coverage are identified, Scott will recommend solutions through a consultative approach, helping clients not only cover these risk exposures, but help them gain a broad understanding of what their insurance coverage can do for them. He has helped clients with personal insurance needs for 10 years, in all 50 states, and specializes in working with the complex situations of affluent clients.
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