Your vintage or collector car may be priceless, but your classic car insurance doesn’t have to be.
Collecting, restoring and owning vintage cars is truly a labor of love. While serious collectors can spend hours buffing the finish of their vintage 1970 GTO, or spend months tracking down an original replacement headlight for a 1928 Pierce Arrow, too may vintage car owners give short shrift to the issue of how to properly insure their baby. Classic car insurance can be remarkably affordable, given what it’s protecting, but you have to be aware of what specific coverage requirements your classic car will need and work with an insurer that can craft a policy specific to those needs.
Unique coverage based on unique needs
According to both the Insurance Information Institute and the Insurance Research Council (IRC), perhaps as many as 50 percent of the vintage or classic car owners in the country routinely put their vintage cars on traditional auto insurance policies without bothering to investigate other options. The problem with this approach is that in most cases, these owners will be greatly overpaying for car insurance policies that may offer inadequate coverage to the needs of the car. One major pitfall in insuring a classic or vintage auto with a standard car insurance policy is that standard car insurance policies are built around the assumption that your car will consistently depreciate in value (for some makes and models, quite rapidly.) Classic cars tend to hold their value or even become more valuable over time. This increase in value can routinely occur because these cars aren’t used the way standard, drive-every-day cars are and as such, have limited risk of wear and tear and damage that could lead to depreciation. These cars also enjoy the same advantage land does – they aren’t making any more.
Determining value
One of the first distinctions an antique car owner should be aware of when considering classic car insurance is the difference in valuation. When you begin building a car insurance coverage plan for your vintage car, you and the insurer will have to settle on what is known as the Agreed Upon Value of your car. In standard car insurance scenarios, your insurer will compare current market values for your car, factor in considerations like how many miles you drive each year and what the standard depreciation schedules for your car are, and from there, determine a maximum replacement value for your car.
Get free estimates on protecting your vintage car with classic car insurance
With classic car insurance, you and the insurer will have to agree upon what the replacement value of your vintage car is. In doing so, you should be sure to factor in considerations such as the time and resources you’ve put into restoring and maintaining the car. You may also want to factor in what it could cost should you need any hard-to-find replacement parts in the future (though many classic car insurance programs have provisions to cover this contingency.)
Is your car really a classic?
While each individual insurer may have slight variations in determining if your car is a classic, in general, the unique coverage afforded collector cars falls into a handful of definitions:
- Antique or classic cars – some insurers make a distinction between these two categories and some don’t. In general, your vehicle will qualify in one or both of these categories if it is more than 25 years old.
- Newer collector vehicles – a class that generally represents newer limited edition cars, exotics, imports, high-end sports cars or even special interest vehicles.
- Modified/customized autos – generally where you will find your hot rods, street rods and high-end replicas.
- Classic trucks and utility vehicles – there are usually limited-use guidelines for these types of vehicles and in general, they must have been built before about the mid-1980s to qualify.
- Vintage motorcycles and scooters – again, there can be limited-use guidelines for these vehicles and in general, only those built pre-1980s/90s will qualify.
- Classic military vehicles
- Antique tractors
- Antique fire trucks and emergency vehicles
- Select retired commercial vehicles
Coverage limits based on use
Once you’ve determined that you have a qualifying vehicle that needs classic car insurance, you will still need to determine what types and levels of coverage you will need to properly protect it. Most vintage car insurance coverage plans are specialized blends of collision/comprehensive that will protect your car against damage and assure you a fair and full replacement value should a tragedy occur and you suffer a total loss. These policies also have provisions to cover full restoration when any repairs may be needed (including paying for original replacement parts.) But there are other considerations that will need to be addressed, including any legal requirements that may have an impact on your full scope of any vintage car insurance coverage.
Some of the questions you will need to answer include:
- How is your vintage car going to be used? – if you only use your vintage car for display purposes, and it will only be “driven” to load and unload it when you take it to shows, it will change the needs you have for coverage. If you plan to drive your classic in parades or at an occasional event, you can get a full-coverage, limited use option. If you are planning on driving your vintage ride on the streets where you live, you may be subject to your state’s minimum car insurance requirements for coverage.
- How often will your vintage car be used? – Similar to how your car will be used, some policies will place restrictions on how many miles you can drive or how many times you can place your car in a show or on display.
- How will your classic be stored? – Most vintage car insurance plans have some specific stipulations on how your covered vehicle needs to be stored. Some plans will be less expensive to you if you have your car stored at a recognized facility that specializes in antique storage and protection. If you store your classic vehicle on your own property, you may have to follow some strict guidelines set by your insurer and occasionally undergo a visit or inspection by an underwriter or agent.
- If the need occurs, who will do repairs? – There are some vintage car policies that will require you to use repair or restoration services pre-approved by the insurer. There are other policies that may allow you to do restoration work (even repair work) yourself in the event that you have the need.
Price-conscious coverage for a priceless classic
If you are a vintage car enthusiast and you’ve invested blood, sweat and treasure into restoring and maintaining a classic, you may be of the mind that money is no object when it comes to protecting it. Prepare to be surprised. Because vintage cars generally have limited use, what you will pay for full and adequate coverage will, in general, be far less than what you will pay for a drive-every-day car that may be worth thousands (even hundreds of thousands) of dollars less.
According to the IRC, you may be able to get full protection of your vintage car for as little as 1 percent of the Agreed Upon Value of the car. How does that pencil out?
According to annual surveys of the most expensive cars to insure published by groups as wide ranging as Kelley Blue Book and Consumer Reports, one of the most expensive cars to insure in 2013 was the Mercedes-Benz CL 600, ringing in at an annual premium for proper coverage of just over $3,300-per year. The Manufacturer’s Suggested Retail Price (MSRP) for that Benz had a low-end of about $116,000. For that same annual premium of $3,300, you could insure a 1959 Porsche RSK open-top silver racer (only 37 ever built!) with a specialized policy that would cover you for this roughly $3 million gem.
Know where to turn for this unique coverage
Getting the right price for the right coverage on your vintage vehicle will require you to go with an insurer that knows how to properly evaluate and cover it. If you don’t do your homework and fall into the crowd of roughly 50 percent of vintage car owners who go with inadequate, “traditional” car insurance plans, you could live to regret it. Fortunately, you have a broad range of resources to consult.
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There are a number of insurance companies that specialize in the niche market of antiques, collectibles and that even sharpen that focus on vintage vehicles only. Some of the leaders in this field include Hagerty Insurance, Grundy, American Collectors and J.C. Taylor Insurance. You can work directly with any of these insurance specialists to put a separate, customized vintage car insurance policy in place. In fact, many of these specialty insurers work with larger insurance providers in a consultant or even subcontractor capacity to offer vintage car coverage. For example, Progressive offers its car insurance customers vintage car protection exclusively through Hagerty. USAA car insurance works with several specialty firms (depending on the state where you live) to provide full coverage for vintage vehicles.
There are also some leading car insurance companies that have developed their own lines of vintage car protection, including State Farm, Safeco, Farmers and GEICO. You can get a separate policy or bundle coverage for your vintage vehicle with coverage for your drive-every-day car. In most cases, there are discounts on premium that can be enjoyed when you combine policies with the same insurer.
Alternatives to car insurance
If your vintage vehicle isn’t subject to specific state car insurance requirements and you rarely will be using it for anything other than display of investment purposes, you may want to consider alternatives to car insurance to keep it protected. Purchasing an Umbrella Liability policy may be one way to go, especially if you plan to store you vintage car on your property. As the name suggests, these are specialized policies that can provide blanket protection fpr your valuable assets against losses. They can also protect you in the event that an injured party makes a claim against you.
Let’s say you have a valuable vintage vehicle and you cause an accident with your daily-use car or somebody gets hurt at your home. If the liability coverage you have in place to pay for damages isn’t enough to cover the costs you ultimately are held accountable for, an injured party may be able to pursue claims on other property you have (including your vintage car) as compensation. An umbrella liability policy could protect you in that event.
If you store your vintage car on your property, you may also be able to get extra protection in the form of a special rider to cover valuable property under your homeowner’s policy.
If your vintage car is used for specific purposes and specific times/dates (for example, if you drive it in the annual 4th of July Parade or use it to escort your local High School Homecoming Court at halftime) you may also be able to put in place a short-term car insurance policy to protect you and your car for only that time when you are both exposed to potential risk for loss or incident.
Making sure that the time, energy, money and emotion you’ve invested in a one-of-a-kind classic automobile are well-protected could take some time. You could benefit from getting the direct advice of a seasoned car insurance expert with experience in the unique needs of classic, vintage and antique vehicles. An experienced agent will be able to answer any of your questions, make sure you have all the legal and practical safeguards in place, and can be sure you aren’t paying too much for too little coverage. Reply! can connect you to car insurance professionals in your area with the experience and tools you’ll need to keep your classic ride going for many more years to come.