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Classic Car Insurance Coverage for Antique, Restored, and Rare Autos

Posted: 09/14/2009 - 2:43 PM ET

The Basics of Classic Car Insurance

Generally speaking, if you own a rare or antique car or truck, you will be best served by buying a classic car insurance policy from a classic auto specialist. Such companies are staffed by people who understand the unique characteristics of antique, restored, and rare vehicles, and who appreciate the differences in the way such cars and trucks are driven, stored, and maintained. Also important is that classic auto specialists are aware that vintage cars and trucks do not depreciate like their newer cousins, but appreciate with time.

Classic Jaguar XKE Photo

When beginning the process of shopping for classic car insurance, you should consider several points in order to determine how comprehensive you wish your classic car insurance coverage to be. Those points are:

  • Can I accept an annual mileage limitation in order to save money on coverage?
  • Can I afford to insure my car or truck for its real value, rather than the lower book value used by mainstream insurers?
  • Will I require additional coverage while I'm restoring my classic truck or car?
Classic Chevy Photo
  • Will I be attending car club events, and if so, will I need to insure against additional liability?
  • Do I need insurance to protect my car from theft or damage when it is at the repair shop, or will my mechanic's insurance provide adequate protection?
  • Will I ever be shipping my car or truck, and if so, will that require extra insurance?

If you've answered YES to more than three of these questions, you definitely need classic insurance, simply because mainstream auto insurance policies do not address the investment that classic auto owners like you typically make in your vehicles, nor do they allow for the way such cars and trucks are generally used. If you choose to pursue mainstream insurance coverage, you'll find that their classic car insurance rates are exorbitant, and the benefits substandard.

Once you've accepted that specialty insurance is the way to go, you'll need to prepare to negotiate with the insurance company's representative. Part of this preparation involves understanding automobile valuation, as it applies to classic cars and trucks.

While mainstream insurance companies use actual cash value, or book value minus depreciation, to determine how much a coverage a vehicle needs, specialty insurers generally use either agreed value or stated value. Here's an explanation of each:

Stated Value

Stated value policies will pay out either the actual cost of repairs or the stated value of the car or truck, whichever is less. While such policies are better than those offered by regular insurers, you may want to avoid them for your own vehicle, for two important reasons:

  • The stated value will only be used to set the level of the premium - the higher the value, the more you pay.
  • The insurer is not obligated to actually use the stated value when paying a claim. Instead they will determine an actual cash value, and base your payout on that.
Classic Car Restoration Photo

Remember that insurers always favor themselves - they will pay out the minimum they possibly can.

Agreed Value:

If actual cash value is for mainstream cars, and stated value isn't advised, what kind of valuation do you want? Look for an insurer that offers agreed value policies. This kind of coverage is based on a valuation that you and the company agree to at the time of policy inception, which means:

  • Your policy will have coverage that accurately represents your vehicle's value, including the cost of restorations, or of any modifications (a note: you must always disclose mods).
  • Your policy will allow for the fact that classic cars and trucks appreciate over time.
  • You will be guaranteed full compensation in the event of a loss.
Classic 1957 Jaguar Photo

What About Cost?

While anyone can give an off-the-cuff estimate of the cost of insurance for a 2010 Toyota Camry or Honda Civic, doing so with classic cars or trucks is a flat-out impossibility, because the very nature of these vehicles means they are entirely unique. The major players in the classic insurance game - American Collectors Insurance, Grundy, and Hagerty - all have reputations for being fairly priced and offering excellent service, and your comparison shopping should begin with them.

When you do shop, you should expect to have your vehicle formally appraised, to be asked for proof of proper maintenance and secure storage, and to present a clean driving record with at least ten years of experience behind the wheel.

A classic car insurance policy can be obtained at an affordable price, but you will have to spend the time doing research and amassing documentation before you seal the deal.

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