Insurance for Vintage Classic Cars

Depending on your planned usage for your new collector, there are several options for classic car insurance. Although getting the right insurance is not complicated, there are some things that you should be aware of that are not so obvious.

Many owners make the mistake of calling their current insurance agent and having them underwrite a standard policy. Seems reasonable enough and hassle free, right? Just roll it under your other auto insurance and take advantage of their “multiple autos” discount. It is estimated that the majority of vintage classic cars are in fact insured this way and those owners are in line to pay for it, in more ways than one. Owners under this description are paying higher premiums and getting less coverage.

The danger with this approach is that the policy your agent gave you is probably the same as your current vehicle’s policy. Even if your current vehicle is a high dollar car, one thing that needs to be considered is; is it appreciating in value? Hypothetically, if you own a newer car for 3-4 years and need to collect insurance in a total loss due to an accident or theft, the payout will be based on the depreciating car value, often based on Kelly Blue Book values for the year, make and model of your car. On the other hand, if you have a beautifully restored 1955 Chevy Bel Air 2-door hardtop stored in your garage, do you think it will be worth more or less three years from now? Hint: more, probably a lot more!

Do not use a standard insurance plan

Classic car insurance has been available for years. You will need to check with your provider, but usually there are some minimal driving restrictions relative to mileage, say less than 5000 miles per year, that apply as a rider on the policy for a vintage classic car. Many will require that you have a day-to-day car already registered so the classic will not be used for routine transportation to and from work or doing daily errands.

Know the various policies

1. Stated Value Policy. This type of policy lets you declare the value of a car that is greater than its depreciated book value. This is better than a standard policy, but will only pay up to the stated amount and does not factor in appreciation.

2. Actual Cash Value Policy. This is more like a standard policy where the value is determined on some kind of depreciated value. With this policy, the insurance adjuster decides what your car is worth. Hopefully they are having a nice day! Not recommended if you are using a insurance company that normally doesn’t cover classic or antique autos.

3. Agreed Value Policy. This is where you and the insurance company agree on the value of the car. There is no depreciation associated with the car. In addition, the agreed upon value can be modified during the life of the policy to reflect increases in value. This way, you are 100 percent protected and assured that you will receive the full value for your car should a loss occure.

Other considerations

• Many classic car insurance policies have minimum age restrictions, 25 to sometimes 30 years old. Younger drivers are not permitted.
• Not all classic car agents are created equally. Make sure you check out their customer service and feel confident that they know replacing a windshield on a 1967 GTO will probably be more expensive than your everyday car.
• Make sure your carrier is licensed in your state.

In summary, make sure you have your vintage classic car covered by one of the above policies and not a standard automobile policy that you would use for your teenagers ’98 Honda Accord. While the liability coverage may be the same, the coverage for your beautifully restored ’55 Chevy may amount to peanuts and not the street value of such a collector.