Understanding Classic Car Insurance
In the US, auto insurance is a state requirement for every car owner, whether you drive a Corolla, a Silverado, an Alfa Romeo Giulia, or a 1961 Ferrari 250 GT California SWB Spider (worth $17 million(. While standard auto insurance will certainly cover your Corolla and Chevrolet, you might be forced to look elsewhere for niche policies to protect your pricy Alfa Romeo and the antique Ferrari.
As a car enthusiast, your automobiles have varying roles based on their value and significance. The Corolla and Chevrolet get a lot of action on the road, probably because they are the beasts of burden of the household. You drive them to work, take them on fishing trips, and use them for everyday errands. In contrast, the new Alfa Romeo Giulia 2020 is a performance car that hardly hits the road unless it is a very special occasion.
The vehicle that will likely cause you to collapse when you find your garage raided is the rarest 1961 Ferrari 250 GT California SWB Spider, because even if you had the $17 million to replace it, you might not be able to find its exact replica anywhere else on the planet. Classic, exotic, custom, high performance, and a variety of other specialty cars are rarely covered at their total value by traditional auto policies in case of theft or total loss as a result of an accident.
As a result, a handful of insurers have taken up the risk and designed a special type of coverage: classic car insurance, which is also referred to as collector car insurance. This insurance plan is designed to cover high-risk cars that cannot be fully protected under a standard auto insurance policy. This page discusses everything that you might need to know about classic car insurance, so click through to read more.
What Is Classic Car Insurance?
Classic car insurance, also known as collector car insurance, is a unique type of auto insurance policy that is designed to protect classic or antique vehicles. Luxury classic and antique cars fetch ridiculously exorbitant prices at auctions owing to their exceptional rareness and uniqueness. For instance, the classic car collector who splashed a whopping $70 million in 2018 on the 1962 Ferrari 250 GTO understandably expects compensation of a similar value in case the car is lost or damaged under insurable circumstances.
While it is possible for traditional car insurance to cover your classic car in the event of total loss or theft, your insurer won’t pay the full value of the car. This means that the owner of the $70 million antique Ferrari will receive considerably less money in compensation in the event that the vehicle was roaming the streets with a standard automobile insurance policy. To protect these high-value beasts, we strongly recommend that the owners obtain classic car insurance from reputable insurers—and will gladly guide you through the process of obtaining the necessary insurance policy for your classic or antique car.
What Makes A Car A Classic?
The definition of a classic car is highly subjective depending on who is answering the question. According to the Antique Automobile Club of America, any vehicle that is at least 25 years old qualifies to be a classic car. An antique, in contrast, is a car that is at least 45 years old.
Despite these formal definitions, many insurance companies define classic cars as vehicles that are between 20 and 25 years old. For the sake of categorization, insurance providers also consider the following special vehicles to be classics: modern performance cars, customized automobiles, exotic automobiles like Lamborghinis and Aston Martins, fire engines, armored military vehicles, high-end motorbikes, race cars, and street rods, among others. In the context of auto insurance, the only definition of a classic car that you should keep in mind is that provided by insurers.
Naturally, your 2013 Chevrolet Malibu is cheaper than the revamped 2020 model. Using the same analogy, one would expect that the 2013 Chevrolet Malibu is way too pricy in comparison to the 1964 Malibu because the latter is old and out of fashion anyway. It is mainstream knowledge that motor vehicles depreciate over time, but not the classics and antiques. These defy the traditional valuation metrics since their current market value is super high as compared to newer models or their prices when they were branded new, even with inflation factored in.
What Does Classic Car Insurance Cover?
Classic car insurance works pretty much the same way as standard auto insurance, except that it provides additional coverage for unique automobiles. Generally, this insurance policy offers all the benefits of a traditional auto policy. The coverage includes bodily injury liability, property damage liability, collision coverage, and comprehensive insurance.
Liability coverage covers the cost of the other driver’s vehicle and medical injuries when you are at fault. Collision coverage takes care of the damage to your vehicle in the unfortunate event of a collision with another car. Lastly, comprehensive coverage pays for damage to your classic car in case of a non-traffic-related accident.
A traditional automobile policy allows you to forego certain coverage options that are not mandated by the state, such as collision and comprehensive, in order to cut down on the cost of monthly premiums. While these coverage packages are optional in the conventional car insurance policy, they are an essential part of the standard classic car insurance policy. In return, you don’t have to pay deductibles.
Besides collision and comprehensive coverage, ideal classic car insurance includes other special coverage options that are not available in a traditional auto policy. The additional coverage will directly address the protection needs of your classic vehicle. Some of these options include the following:
- Agreed value coverage
- Restoration coverage
- Spare parts coverage
- Memorabilia content coverage
- Traveling coverage
- Auto show medical reimbursement
- A no-attendance-required coverage
Some of the additional coverage is unique to specific providers who perfectly understand the classic car culture and what exactly your car needs might be. Before purchasing a classic car insurance policy, it is therefore essential to gather all the necessary information about the insurance coverage options offered.
How Much Does Classic Car Insurance Cost?
The cost of classic car insurance is generally cheaper when compared to a standard auto policy. This is because classic cars are considered low-risk by insurance providers. On average, you can pay between 30% and 40% less for classic car insurance when compared to a conventional auto coverage package. Collectors have been known to “love” their classic cars a bit more, with some even keeping them as trophies in their garages.
These ancient street kings hardly hit the road, which means that they are exposed to minimal risks in comparison to modern models that are used for everyday commutes. Therefore, the classic car insurance policy is designed to reflect this reality. We can help you get affordable quotes from providers in your region. This will enable you to compare different options and pick the ideal insurance policy that addresses all your specific classic car needs.
What Are The Benefits Of Classic Car Insurance?
Classic car insurance provides your car with all the benefits of standard auto insurance together with a host of other coverage options that directly address the needs of classic cars. Since you don’t often drive your classic car, it would be unfair to pay more to insure a vehicle that is always safely tucked in your garage. The benefits of choosing classic car insurance include the following:
- You get to pay lower premiums since the car isn’t exposed to a lot of risks.
- You receive compensation for the actual value of your car.
- You will be eligible for dozens of other optional coverage options that are unique to classic car insurance. These coverage options will help cover any sort of risk posed to your car.
Frequently Asked Questions
1. Is there a mileage limit for classic cars?
One of the reasons classic car insurance costs less compared to a standard auto policy is because providers impose mileage restrictions on the classics. Different insurers have different annual mileage limits for these cars, which every classic owner should adhere to. If you need more mileage, you can always negotiate with your insurance provider to have your mileage limit adjusted at an extra cost.
2. How do I know if my car is a “classic?”
According to insurance providers, your car is a classic if it is at least 20 to 25 years old. Also, your insurance provider will consider the following vehicles as classics: modern performance cars; customized automobiles, luxury exotic vehicles (like Lamborghinis, Aston Martins, and Alfa Romeos), fire engines, armored military vehicles, high-end motorbikes, race cars, and street rods, among others. According to the Antique Automobile Club of America, however, a car is a classic only when it is at least 25 years old. Market experts suggest that you always consult with your preferred insurer to determine whether your car qualifies to be a classic.
3. Are there restrictions on how I can use my car?
Since you will be paying lower premiums for a high-value vehicle, it is only understandable that your provider will set restrictions on how you can use the car. Aside from limiting the usage of the classic, your insurer will also dictate the storage conditions of your vehicle.
4. Does my driving record impact my insurance premiums?
Absolutely yes! Most insurance providers demand that you have a clean driving record and experience of between five to ten years. You also need to have had not more than one at-fault accident or a moving violation within the last three years.