There’s nothing ordinary about antique and classic vehicles. Their age, relative rarity, parts availability and market dynamics are quite different from those of daily drivers. We drive them quite differently, too. Rarely do we commute to work or school on a daily basis in a classic car, and for most enthusiasts, it’s rare for us to even drive them in the rain (to say nothing of snow and ice). It stands to reason, then, that when it comes to insuring classic cars, an ordinary auto insurance policy simply won’t do. Instead, you want to look at policies geared specifically toward classic cars.
Classic car policies are typically based on 12-month terms. State laws differ, but most require coverages to include liability, collision, comprehensive, medical payments, and coverage for uninsured or underinsured motorists. As with regular insurance, premiums are based partly on your age and driving record, but many of the underlying actuarial assumptions can differ significantly. You’ll likely be driving your classic vehicle for pleasure only, mainly on weekends, and hardly ever to and from work, for example. Insurance companies that specialize in classic and collector vehicles offer cool extras as well. More on that later.
Finding an insurance company offering a classic auto policy is easy. You can start by asking the company that currently insures your daily driver and/or home. Companies like Esurance, Farmers, GEICO, Progressive, Safeco and State Farm all have them. They generally provide discounts for multiple policies, so it makes good sense to start with these first. There are a number of specialty carriers out there too, including American National, Condon & Skelly, Grundy, Hagerty and J.C. Taylor, among others. The ClassicCars.com Insurance Resource Guide shows even more.
Standard auto policies reflect the car’s market value, which depreciates every year. If a theft or accident renders the car a total loss, the insurer pays the depreciated value. A collectible car, however, doesn’t depreciate. In fact, its value often increases over time. This makes sense, as classics tend to become rarer through the sheer passage of time. Also, unlike daily drivers, classic and collector vehicles tend to be restored, and a proper restoration can add significantly to a car’s value. To be properly insured, a classic car policy is based on a valuation that you and your insurance company agree to beforehand. Specialty insurance companies have a good idea of what any given classic car is worth, so be prepared to substantiate the value of your vehicle if it differs significantly from what your insurer assumes.
Because the value of your classic auto is appreciating, keep on top of the agreed-to value from year to year, especially if you’re finishing a restoration.
Overall, the risks of owning and driving a classic car are lower than that for daily drivers, and the premiums for collector car coverage reflect that reality by being usually much lower than for new and late-model daily drivers. Classic car policies typically limit miles (7,500 miles per year is a common limit). They may also put restrictions on the types of destinations a car may be driven, such as to car shows or similar events. Insurers may stipulate minimum storage requirements.
As noted, the most important criteria to qualify for classic car insurance is a vehicle’s appreciating value. But as you shop around, you may see different classifications, definitions, years of inclusion and descriptions that vary from insurer to insurer and state to state. Depending upon how they classify your vehicle, different insurance companies can offer widely varying rates for coverage. For example, two common terms are classic car, often defined as 19 to 24 years old, and antique car, commonly defined as 25 years and older). Additionally, there are special policies out there for trucks, tractors, boats, street rods, hot rods, motorcycles and many other enthusiast interests.
As mentioned above, insurers offering specialty collector car insurance may bundle interesting extras with their policies. Here are a few we have come across from various insurers:
As you can see, classic cars, muscle cars, antiques and the like are special cars that require special insurance coverage. While your family’s usual insurer may be able to take care of the basics, specialty insurers really understand the hobby and offer unique and interesting coverages that cater specifically to classic car enthusiasts. However you insure your classic vehicle, be sure to consider your needs carefully and always read the fine print.