Classic cars are driven less but are worth much more than every day cars.
Insuring a classic car involves a slew of variables for owners and insurers. Overall, insurance premiums for classic cars are generally lower. Owners rarely drive their classic car. When they do, they are generally more careful than average drivers. Here are the critical differences in getting the right car insurance policy.Is Your Car Classic?
Each auto insurer will have their own criteria for what constitutes a classic car. Generally speaking, a classic car must be one that was built before 1980 and will appreciate in value. Some subcategories of classic cars include kit cars, custom cars, street rods, exotic cars, collectibles and antiques. Classic car insurer Hagerty has this handy guide for classic cars on their website.
Classic Car Valuation
The valuation of an average car is know as Actual Value by insurers. It’s the market value at time of loss. Classic cars can be insured by what’s called Agreed Value. Agreed Value is an amount settled upon for insurer and insured at the time the policy is created. It considers not only market value, but potential value, as classic cars appreciate over time. Valuation should never be done by a car owner, but by a professional appraiser.
Risk for Classic Cars
Classic cars are not driven everyday, so they encounter less accident risk and generally lower insurance premiums. Classic cars face other risks however. The most common is breakdown, as many classic cars are old and restored by hobbyists. Classic car owners are six times more likely to experience a break down than a claim. Another concern is obviously theft. Many classic car policies do not include coverage for fire or theft.
Classic Car Insurance Policies
Aside from Agreed Value, classic car policies includes other unique features. Roadside service, spare parts coverage, a $0 deductible and trip continuation coverage are a few. Owners should make sure a flatbed tow truck is included in the roadside assistance so the car is less likely to get damaged after a breakdown. Drivers of classic cars exponentially benefit from a clean driving records. Some policies feature a yearly mileage cap of around 2,500 miles, as well as restrictions on where the car can be driven.
If a classic car is especially rare parts may be scarce. This should be taken account when the policy is written. Unlike many modern cars, finding parts or outright replacing a classic car isn’t possible.
Classic cars get special attention from their owners and their insurance policies should be no different. It’s important for owners and policy writers to understand the unique nature of each classic car in order to arrive at a satisfactory insurance policy.