Classic car owners aren’t your average drivers. Most people today prefer advanced technology like self-parking, lane-change warnings, cruise control, satellite radio, GPS navigation and bluetooth connections. Classics and historic vehicles don’t offer these amenities unless you add them. Safety features such as crumple zones, airbags and disk brakes or seatbelts were never equipped on most cars made before the mid-1960s. Without all these bells and whistles, is car insurance cheaper for classic cars? On the flip side, without all the modern safety features and driving assistance, does classic car insurance have higher premiums?
What Is a Classic Car?
Not every collector car is a classic. There’s no “official” definition, but other common terms like vintage, antique or historic are used to describe cars more than a couple of decades old. It can be surprising, but some classics aren’t really that old. The Classic Car Club of America (CCCA) has a specific definition for cars it designates as classics. It can be unexpected to learn many of them were made by mainstream carmakers as late as 1948. See this article about how old a car need to be to qualify as a classic.
What Makes Classic Car Insurance Different
The most significant difference between collector car insurance and normal car insurance is the amount of payout as a percentage of your vehicle’s original price. Regular insurance coverage will pay what’s known as “actual cash value” or ACV in the language of car insurance. This number comes from an assessment of a vehicle’s market value at the time of an accident.
The specific number is based on factors like original cost with options, amount of wear on brakes and other components, mileage on the car and damage like torn upholstery, worn carpeting, dents, scratches, cracked windshield and amount of tread on the tires. There’s also a certain amount of depreciation. Most appraisers and insurance adjusters take 20 percent or more off the value of a new vehicle as soon as it leaves the dealership.
What this means in practical terms is that without special coverage, a typical insurance company will never pay out enough in the case of a total loss to replace the vehicle with a new one, or even the same make, model and year in most cases. For a classic car owner, this might mean, for instance, the company will only pay for the car’s value in 1935, minus depreciation. Unless there’s an adjustment for the decades of inflation and the car was very expensive to begin with, that amount could easily come to no payout at all for a total loss. Specialty insurers write policies for collector cars that specifically address this issue.
What Does Classic Car Insurance Cover?
With classic car insurance, most insurers will write a policy for an agreed value, a term that means the insurance company and the owner have agreed what the value of the car actually is. In most cases, the insurer will want to inspect the car, may need an appraisal of the car from an outside source and is likely to require documentation like receipts and photographs to arrive at the agreed value.
Subject to certain restrictions placed on the use and storage of a collector car, insurance for classic cars will cover needed repairs of such minor damage as scratches and dents from transporting the car as well as engine repairs and repainting. Some items have to be negotiated or chosen for coverage and may raise the rates slightly, but most types of repair or recovery that are covered under normal insurance policies are also available under a plan from a specialty agent.
How Much Does Classic Car Insurance Cost?
According to several specialty insurers, quotes for plan premiums on classic car insurance can average 40 percent less than the rates for regular car insurance. There are a number of reasons for this.
- Owners driving their classic cars less frequently and for less mileage than a daily driver.
- Storage restrictions by the insurance agent to keep the car garaged and secure from weather and damage.
- Classic owners have better driving records as a group because they want to keep their restored cars in good shape.
Who insures classic cars?
Quotes for classic car insurance are available from many specialty insurance carriers like Hagerty, Leland-West, Classic Auto Insurance and Grundy as well as most major insurance companies. It’s best to comparison shop and get quotes from multiple insurance companies to be sure you are getting the best value and coverage.
Classic car insurance usually offers better rates, more complete coverage and lower premiums than standard insurance, without the high deductibles. However, these lower costs usually come at the price of voluntary restrictions on how much and how far your car can be driven and the ways in which the car is stored. Additional documentation may be needed to prove that you have a newer car for daily driving and that the car is in good condition. Given the savings of up to 40 percent over standard policies, it’s in every classic owner’s interest to go with specialty insurers to cover any classic car.