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UPDATED: Mar 13, 2020
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Collecting and restoring vintage cars is a hobby that’s been around since the early 1970s. Vintage car collectors love to get their hands on a classic old vehicle in order to restore it to its former glory. Yet protecting one’s investment in such a vehicle requires something known as vintage or classic car insurance. Because most people are unfamiliar with this type of insurance policy, we’ve written down some important things you need to know.
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Before we begin, let’s define what we mean by the term vintage car. Also known as classic cars, there’s no hard and fast rule to define what they are.
The Classic Car Club of America defines a vintage vehicle as one that was manufactured between 1925 and 1948, and is unusual or exemplary in some way. Other clubs include cars up through the 1970s in their definition.
Definition for Insurance Purposes
Insurance companies also have varying definitions of what constitutes a vintage or classic car. However, as a rule, anything manufactured prior to the 1980s is considered a vintage vehicle if it’s used for show and collector purposes rather than being driven regularly for work or recreation. In other words, your 1968 Buick may be a classic to you, but if it’s your everyday vehicle for all of your routine driving, your insurance company is likely to consider it no different from a normal passenger vehicle.
For insurance purposes, a vintage car will spend most of the time garaged or at public auto shows. Sometimes they’re driven to and from various sites; other times they’re towed on trailers. But for a car to be insured under the vintage classification it cannot be used by the owner as his main mode of transportation. With that said, there are three things you need to know about vintage car insurance.
#1 Rates are Commensurate with Use
Because car insurance rates depend heavily on the amount and type of use a vehicle gets, vintage cars tend to cost less because they are not driven on public roadways very often. For example, if you were to own a classic Edsel like the one found at the Sarasota Classic Car Museum you would most likely take extremely good care of it to the extent that you would avoid driving it out on the highways. You would not want to take the risk of wrecking it in an accident.
That being the case, it’s reasonable to assume the car presents a fairly low risk of collision claims for the insurance company. Any claims made for the vehicle would most likely be part of a comprehensive policy due to damage suffered at an auto show, in a garage, and so on. The reduced risk means you’ll pay significantly less for the policy; by some estimates, it could be as much as 25% or 30% less.
#2 Policies Should Be Based on Agreed Value
This might possibly be the most important thing you need to know about vintage car insurance. If you’re unfamiliar with auto insurance policies, they are typically divided into two separate categories: actual cash value and agreed value. The differences between the two are explained by the state of New Jersey in the section of their administrative code dealing with auto insurance.
Simply put, an actual cash value policy is one that pays to repair or replace your vehicle with something substantially similar in terms of year, make, and model. It doesn’t take into account the condition your vintage car was in when it was damaged or how much money you put into it. It simply pays but what it cost your insurance company to buy a car of similar make, model, and year in reasonable condition.
An agreed value policy is one that covers the full value of the vehicle as agreed to by both the owner and the insurance company. This type of policy takes into account the value that’s been added through restoration and modification efforts. This is the type of policy you want for vintage car in order to protect your financial investment in it. It will require an insurance agent to inspect the vehicle, do some research, and negotiate with you over a fair value you can both agree to.
#3 If You Want to Race Make Sure You’re Covered
This is certain subset of vintage cars known as muscle cars. These types of cars are not only restored, but also modified with high performance engines and other parts in order to make them faster and more powerful. It is no surprise that owners of muscle cars pride themselves on the modifications they’ve made.
Muscle car drivers love to demonstrate any modifications they’ve made to their car by racing against other drivers.
This is all well and good, but vintage car owners need to make sure they’re covered if they intend to race. By default racing won’t be included in the typical vintage car policy. It’s too risky for an insurance company to offer as part of a base policy. So if you intend to race, you’ll have to have a rider added that will cover both liability and collision claims.
This is one area where vintage car insurance could get costly, especially if your particular car is of exceptionally high value. After all the time and effort you’ve put into restoring your vintage car you might want to think long and hard before insuring it for racing. You may get your money out of it after an accident, but you may not be able to restore the car to its former glory a second time.
Where to Find a Vintage Car Insurance
There are a couple of options for finding a good vintage car policy. The first is to contact your regular insurance provider to see if they offer coverage, you can combine with your standard auto insurance. If so, you may get away cheaper by combining both in the same way you save money by bundling your car, homeowners, and life insurance policies with the same provider. Not every car insurance company does this, but you won’t know if you don’t ask.
The second option is to visit a classic car event like the Annapolis Car Show held in Maryland every summer. Quite a few classic car experts suggest these shows are a great way to find an insurance company that understands the classic car hobby. If you prefer dealing with an insurance company whose expertise is in vintage vehicles, rather than your run-of-the-mill provider, you’ll find these companies setting up shop at car shows.
Your third option is to simply go online and do a search for vintage car coverage. A number of insurance companies around the United States specialize in classic car coverage. Their policies might be more expensive due to their expertise, but you get a top-of-the-line policy that can most likely be tailored to your specific vehicle and its use.
Options for Vintage Car Insurance
Like standard car insurance, there are basics included in just about every policy along with extras you can add as needed. A basic policy for a vintage car that’s not driven on public roads would include a small amount of liability along with comprehensive coverage to protect against different sorts of damage. If a car were driven on public roads, even if it’s just to and from classic car events, the base policy would include liability, collision, and comprehensive.
Some classic car insurance companies offer interesting extra coverage such as breakdown and recovery.
This type of insurance gives you a measure of financial protection when you’re transporting your classic car to a show or other event.
If you’re driving it, and you should happen to break down en route, the insurance will pay to recover your vehicle and get it to a qualified repair shop. If you were towing the vehicle, the policy would also pay for recovery and storage if the tow vehicle breaks down en route.
A fully comprehensive vintage car insurance policy may even pay for a certain amount of food and lodging should you break down either going to or from a classic car event. These policies caused the most, but they give you protection for virtually any circumstance. You’ll have to specifically ask for this type of policy you want it.
Owning and maintaining a vintage car is a great hobby if cars are your thing. It provides endless hours of interesting activity, great friendships with other car enthusiasts, and the ability to enjoy a sense real accomplishment after you’ve restored a classic favorite.
It can also be an expensive hobby at the same time. Keep in mind that one way to control your costs is to find an affordable vintage car policy that meets your needs.
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