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Classic cars are a national obsession: we love to rebuild and restore these parts of our national history. These special vehicles need to be protected by car insurance just like our every day cars do. However, standard car insurance isn’t designed for classic cars.
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The classic car owner has a special set of needs that regular car insurance doesn’t usually provide. That’s where classic car insurance comes in. These policies are specifically designed to protect your investment in your classic car.
Classic Car Insurance vs. Standard Car Insurance
The primary reason that regular car insurance isn’t adequate protection for your classic car is the different ways they calculate the value of the car. The type of car insurance you carry on your every day commuting or family cars assumes that the car depreciates every year you own it.
Just a couple of years after you buy a new car; it’s only worth approximately 70% to 75% what you paid for it. If you total the car, this is all the insurance will pay you for your car.
Classic cars are different. Because they are collector’s items, they don’t depreciate in the same way. Some classic or antique cars actually become more valuable as they get older because they are so rare. If you try to insure this type of car with standard auto insurance, you’re likely to lose a lot of money if something happens to it.
In addition, classic cars need extra protection at places like car shows. Because these often occur on private property, you’ll need to make sure that any car insurance policy for your classic car will cover any damage done in this instance.
Actual Cash Value vs. Agreed Value
No matter where you buy your classic car insurance, make sure it is an agreed value policy. This is the best type of protection for your collector car.
Actual cash value is the method most car insurance providers utilize. Basically, it refers to the blue book value, or the cost to replace it with a car just like it. Blue books assign a lower value each year due to depreciation.
Agreed value refers to an agreement upon the value between an owner and the insurance company. This value is determined by combining several factors. One is the price you would be willing to sell it for. An independent appraisal also factors in. The insurance company will also usually want detailed pictures so they can determine whether your expected value is reasonable.
If the car has any specialty parts, be sure to not that in the records as well.
An agreed value policy will pay the full price of the value during the length of the policy, with no depreciation figured in. A new appraisal might be needed at renewal time, depending on the company.
If you can, also stay away from something called stated value. This option sounds good as the company let you state what the value is. However, since they are just taking your word for it, they are often reluctant to pay that full amount if the car is totaled. In fact, usually the small print allows them to revert to actual cash value if they deem it appropriate. Moreover, these policies are usually more expensive.
Thus, it is worth the extra time and expense to get proper pictures taken and an appraisal executed to set an agreed value.
Special Features of Classic Car Insurance
Are there any other reasons why classic car insurance is better? Besides being sure that you are covered for the full value of the car instead of a depreciated value, there are a couple of other reasons.
First is coverage on private property. Many car shows and the like are held on private property. Often the police are reluctant to assign fault on incidents that occur on private property. However, classic car insurance considers this and makes sure that any damage your classic car suffers will be paid for.
Perhaps the best thing about classic car insurance is the price. Classic car insurance is much less expensive than normal insurance. The reason this is the case is that most classic cars aren’t driven much. As collector items, they are stored most of the time in a covered garage or storage building, only driven on special occasions. Additionally, drivers are usually cautious with them, as they don’t want to risk their investments.
This lower propensity for risk is music to the ears of insurance companies, and leads to lower premiums. However, in exchange for these lower prices, the companies usually put a few restrictions on your use of you classic car.
Many policies restrict the amount of miles you can out on your classic car each year, normally around 2,500 miles. They will also direct how and where the car must be stored when not in use. The policies also won’t cover any commercial usage, like if you rent the car out. They also require that you have another car that you can use for everyday use.
Quote from Your Current Insurance
The first place to look for a classic car insurance quote is with your present insurer. Some insurance companies not only cover personal cars for commuting and family use, but also cover classic and antique cars. If this is the case, then it’s worth getting a quote from your current insurance company. If you have an agent, you can contact him or you can call the insurance company’s customer support line and ask.
Don’t let them just add the car onto your other policy, as this won’t give you the coverage you need. However, if they will draw up a separate policy just for the classic car, see what they can do for you. You might get a discount on your insurance for having more than one policy with them. Just make sure you make sure of the following:
- They use an agreed value for the policy.
- They cover damage at a car show and any damage during transport to a car show.
- You understand the restrictions on driving they will require.
- You retain control over the type of parts and where you take it for repairs.
- You understand the process of getting it appraised to set the value.
Search the Internet for Classic Car Insurance Specialty Companies
Don’t stop with your regular car insurance company however, even if they are willing to give you a quote. The Internet gives you a great resource of classic car insurance companies.
Many of these companies specialize in this type of insurance. In fact, that’s all they do. So they understand classic cars and owners who have spent so much time and effort restoring and collecting them. Usually their policies already have the things we’ve been talking about, like agreed value.
Remember that many companies require photos of the car before they will finalize what your premium is. While they don’t all require it, an independent appraisal can be very helpful in making sure that you have the proper coverage on the car. Also, always keep documentation for parts that you add or replace.
As with anything you buy on the Internet, buyer beware. While nearly all these companies are respected, reliable companies that provide a valuable service, do your homework. Make sure that you look up the company on sites like Standard & Poors and Weiss Ratings.
These independent sites rate insurance companies on things like financial stability and whether they’ve had run-ins with any state insurance regulators.
You can also look on your state’s department of insurance website for any complaints filed against the company in your state.
Get Recommendations from Car Clubs
People who restore or own classic and antique cars like to spend time with others who share their enthusiasm for these pieces of our automotive history. Thus, they often become members of various clubs. Sometimes these are based on the type of car you own, like a Chevrolet Corvette. Others are based on the age of the car.
There are many local clubs all over the country. The two main national clubs are the Classic Car Club of America and the Antique Automobile Club of America. If you aren’t already a member of one of these clubs, reach out to either one of these national clubs or find a local one to get recommendations for classic car insurance.
This is an excellent place to find car insurance for these cars as these car owners are going to have the same needs as you will. They can also tell you which companies they’ve had problems with, which can be just as helpful. If you get quotes from any of these recommendations, you can be confident that these companies know how to treat classic car owners.
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