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Owners of antique and classic cars have special requirements when it comes protecting their financial investments. That is why they purchase what’s known as specialty car insurance. Read on to discover three facts about specialty car insurance you might not know.
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The type of auto insurance coverage you need for a classic or antique car really depends on the car itself and how it’s used. Therefore, specialty insurance isn’t for just any car older than your parents are; there are specific guidelines and requirements that go along with it.
Fact #1 — Your Car May Not Qualify
While it’s true that most classic car owners can find some sort of insurance coverage on their vehicles, not all older cars qualify for specialty car insurance according to the letter of the law. Things differ from one state to the next just as they do with standard car insurance.
The differences come by way of individual state definitions of classic and antique cars, and the registration and insurance requirements for each classification. For example, older cars in the state of Arizona are classified under two categories: classic cars and historic cars.
According to the Historical Vehicle Association, a classic car in Arizona must be on a list of cars supplied to the DMV by the Classic Car Club of America. Such cars also need to be registered if owners plan to drive them on public roads.
Arizona’s requirements for recognition as a historic car include a manufacture date that makes the car at least 25 years old. By definition, more older cars in Arizona would qualify as historic than classic. In either case, the classification in your state plays a big role in determining the type of classic car insurance you’re eligible for.
Fact # 2 — You May Be Subject to Storage Requirements
Because classic and antique cars are not easy to determine values on, insurance companies are taking a huge risk by offering policies to owners. To help offset that risk many of them have certain storage requirements that owners are obligated to comply with.
One such example might be an insurance company that would require a classic or antique car be stored in a secure garage with proper climate control and anti-theft mechanisms. The garage might be on the owner’s property or in a separate location.
Another insurance company might take the storage requirement one step further and force car owners to specifically utilize garage space through a commercial provider who specializes in classic car storage. These types of storage facilities are fairly common in areas with warm climates such as Florida, Arizona, and Southern California.
Keep in mind that even when an insurance company has storage requirements that doesn’t necessarily mean your car can never leave the garage. It’s understood you’ll be taking it to classic car shows, parades, and various types of festivals. If your registration allows, you’ll probably even take your car out for a leisurely drive every now and then.
Fact #3 — Some Drivers May Be Restricted
If the registration on your classic or antique car allows it to be driven on public roads, your insurance company may restrict operation to only specific drivers. Why? Because certain types of drivers are more likely to have an accident than others. Insurance companies simply don’t want to take that risk.
To drive this point home one need only consider statistics, which show teen drivers to be the most dangerous on the road. According to the Centers for Disease Control and Prevention (CDC) drivers between the ages of 16 and 19 are four times more likely to be involved in an accident than their older counterparts. Furthermore, their accidents tend to be more serious and financially costly.
Knowing this it is quite likely that an insurance company providing specialty car insurance would insist the owner’s teenage children not be allowed to drive the vehicle. If the owner allowed it anyway, and the teen driver was to be involved in a crash, the insurance company would be under no obligation to cover the damages.
Not for Daily Use
Be aware that an insurance company offering specialty car insurance policies will most likely insist that your classic or antique vehicle not be your daily driver. In other words, you’re going to need a non-classic vehicle, with a standard auto insurance policy, that you use to drive to and from work and to run errands.
Any miles put on your classic car will have to be limited to demonstrations and the occasional leisure drive.
The definition of “daily use” will differ from one insurance company to the next. Since there’s no way for them to monitor your driving every time you leave your house, some insurance companies will look at mileage. One may not allow you to exceed 2,500 miles in 12 months; another may allow you to go as high as 3,500 miles.
In either case, you’ll need liability insurance if you plan to drive your car on the roads for any reason. If you want to add additional collision and comprehensive, you’ll most likely have to get an agreed value policy worth a dollar amount both you and your insurance carrier can live with.
For example, if you owned a 1957 Oldsmobile Super 88, as the one featured by the Discovery Channel’s How Stuff Works, you would have a vehicle that is considered very high value on the open market. Yet it may be worth more to you because your father owned it. You and your insurance company would have to meet in the middle on its insured value.
What Specialty Car Insurance Policies Cover
Just like standard car insurance, you can get a basic specialty policy which only covers a few things, or you can get a top-of-the-line policy to cover just about anything under the sun. That is something you’ll have to talk over with your insurance agent in order to determine what’s best for you.
Generally, a basic specialty insurance policy will cover minimum liability amounts in your state as well collision and comprehensive coverage. The liability portion will take care of the same types of things covered under the liability portion of a standard car insurance policy.
As for the collision and comprehensive coverage, they may offer a wider range of coverage to take into account things like customized parts, the unique circumstances of typical auto shows, use of your vehicle in a parade, and so on.
Specialty Car Insurance Extras
If you’re the type of owner who does more with his classic car then merely store it in the garage and take it out once or twice a year, you might want to consider adding some extra coverage to your specialty insurance. One example would be business use insurance.
This type of specialty car coverage protects your car when you make it available for things like photo shoots, films, or promotional events. There are companies, like Creative Film Cars that actually solicit car owners to make their vehicles available for such purposes. For the same reason, there are other car owners who engage in these activities on their own.
Perhaps you’ve taken your Mustang convertible to a regional classic car show only to have a couple ask if they can use it in a photo shoot for their upcoming wedding. If you want to make the vehicle available, it would be a wise idea to have business coverage on it. Otherwise, any damage incurred might not be covered.
Examples of other extras included medical coverage during antique car shows, breakdown coverage that includes flatbeds and rental cars, travel insurance to cover meals and lodging in the event of a breakdown, and even insurance to pay for specialty tools that might be necessary to repair your vehicle while away from home.
Look for Customizable Policy
When you’re searching for a specialty car insurance policy, it helps to find a company willing to customize one specific to your needs. It’s one thing to offer a generic, one-size-fits-all policy for new vehicles used as daily drivers.
Classic and collector vehicles are as unique as their owners.
By being able to customize your policy, you can account for all the things that are important to you. To that end, it helps to talk with other classic car owners; their experience with various insurance companies and claims is a great source of knowledge and wisdom.
Whatever you do, don’t get into the classic car hobby if you’re not willing to purchase insurance coverage for your vehicle. It is a very expensive hobby under the best of conditions; it can literally put you in the poor house if you get involved without insurance coverage.
If you’re willing to invest tens of thousands of dollars, or more, just to purchase a classic car, it only makes sense to spend an additional few hundred dollars to get an adequate policy. Specialty insurance is not as expensive as you might think.
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