As any classic car enthusiast knows, a collectible car is an investment and as such should be protected with the right amount of insurance. Traditional car insurance just doesn’t cut the mustard when it comes to safeguarding a prized classic car.
There’s no one standard definition of a classic car. In general, the car is 25-30 years old or older and its value exceeds its original selling price. Classic cars can include vehicles like hotrods, modified vehicles, muscle cars and classic trucks.
If well cared for and maintained, classic cars can increase in value every year, unlike everyday automobiles, which generally lose value as soon as they’re driven off the lot.
Classic car insurance is a specialized product designed to meet the coverage needs of collectible car ownership. And although they may baby their vehicles, classic car owners can make some common mistakes when it comes to buying coverage for their investment.
Let’s take a look at three common mistakes people make when purchasing classic auto insurance.
#1 – Not Understanding Eligibility and Qualifications
Despite what some people think, a car’s age is not the only determining factor when it comes to qualifying for classic car insurance.
It’s hugely important to understand some of the standard requirements most cars need to meet in order to be considered “classic” and to qualify for this specialized insurance.
Usage
If you’re using your classic car as your primary driving vehicle, it won’t qualify for classic car insurance. Policyholders typically are limited to using their vehicle for special occasions like participating in a parade, car show or exhibition.
That means you can’t use a classic car to run errands to the grocery store or take your kids to school, and most policies include mileage limitations that can vary by state but usually don’t exceed 7,500 miles per year, so it’s important to understand what those are before purchasing a policy.
In fact, many insurers require proof that you also own an “everyday” vehicle before extending classic car coverage.
The bottom line is that most insurers will not cover a claim if it’s determined you’ve driven your classic car for everyday use.
Shows and Meetings
As mentioned above, it’s important to understand the limited use provision in any classic car policy because even when it comes to car shows and special meetups, there can be limitations on use.
Some insurers require even more specialized coverage for shows and meetings and may include travel restrictions on multi-day or high-mileage drives.
Storage Requirements
Most policies include language governing how and where a vehicle must be stored usually in a locked, enclosed, private structure.
Driving Record
Many classic car owners don’t realize they must have a clean driving record to qualify for this type of insurance. If there are serious offenses on your record (like reckless driving, DUIs or frequent speeding violations), you may be disqualified from classic auto insurance.
Exotics
Many companies won’t cover this class of car, which includes vehicles that are under 15 years old but have the potential to increase in value. These also can include cars that are old but not necessarily classic, antique, vintage or veteran.
#2 – Not Understanding Agreed Value
Because each classic car’s condition is unique, there’s no uniform book value for various makes and models. Instead, you and your insurer must come to an agreement on the vehicle’s value (often called “guaranteed value”), and your classic car will be covered up to that agreed-upon value (without depreciation).
Resources like the Old Cars Report Price Guide, underwriter’s research and professional appraisals can be useful in determining an agreed value for your classic car.
#3 – Not Asking About Coverage Adjustments
As you drive an everyday automobile, it decreases in value, unlike a classic car, which may gain value each year. So it’s important to adjust your coverage amounts to match the appreciation value of your classic vehicle.
Restoration Costs
Classic car owners should ask whether specialized repair or restoration costs are covered under their policy. In many cases, these specialists cost two to three times more than what you’d pay at a typical auto body repair shop, so it’s far better to know ahead of time whether these costs are eligible for coverage.
Specialized Services and Parts
Coverage amounts may need to be adjusted for specialized towing and spare parts. Transporting a classic car can be much more expensive than moving an everyday vehicle, and it’s important to understand ahead of time whether your policy would cover this type of expense.
Similarly, the cost of replacing classic car parts is typically much more expensive than replacing those of an everyday vehicle. Classic car owners should ask whether hard-to-find and other replacement parts would be covered under the policy.
Estimated Increases in Value
Make sure you have the option of negotiating the agreed value if you estimate your classic car has increased in value. This is especially important if you have restoration projects planned since these can significantly increase the value of a classic car.
Ask the Experts At Classic Auto Insurance
Whether you own a classic muscle car or a Model T, you need to protect your investment and ensure it will last for years of enjoyment to come.
Make sure you understand the ins and outs of classic car insurance before purchasing a policy to get the strongest coverage available and avoid unpleasant surprises in the future.
Let Classic Auto Insurance walk you through the details of available coverage so you can make the best, most informed decision when purchasing classic car insurance.
We offer affordable, Agreed Value coverage for a variety of collector, classic and custom vehicles. Our friendly, knowledgeable staff can answer your questions and give you a quote on the spot. Call (888) 901-1338 or get an instant quote online.
