Credit: Shutterstock photoThe road is full of strange looking cars. Cars from the 50's, cars with weird looking parts, cars that once fought in wars. Have you ever wondered how you would insure such a vehicle? The answer is classic/collector car insurance. Though not widely known, it is a vital type of car insurance used by car collectors or those who have an old time valuable car.
Perhaps you’ve always wanted to get a collector car, or currently have one uninsured sitting in your garage. You can’t really go to your local Progressive to get it insured. So who has the best classic car insurance? And how can you go about getting it yourself?
Classic Car Insurance V.s Regular Car Insurance
The key difference between a classic/collector car and a regular car is how their value changes. The Toyota Camry you may be driving now will only decrease in value as time goes on. On the other hand, a 1968 Ford Mustang has only been gaining in value. A regular car insurance policy is meant for cars that depreciate. If you total a normal car three years after buying it, your auto company will only pay you for what the car is worth at the time.
When it comes to classic cars however, when you sign your policy, you and the company negotiate an “agreed value”. Basically, it is a guarantee that no matter when damage may befall your car, the company will pay out what your car was worth when you signed the policy. Some companies may even offer an inflation guard, which will increase your coverage as your car appreciates in value. It is a fundamental difference, and the main reason why a regular insurer cannot insure your classic car.
What Qualifies for Collector Car/Classic Car Insurance?
Collector car is certainly an umbrella term. Companies that specialize in this type of insurance actually insure many types of non-traditional cars. There are your routine classic cars, which are cars usually over 15 years of age that have appreciated in value. There is also insurance for modified cars, which are usually cars with over $10,000 worth of non-standard parts. You can also insure kit cars, which you build yourself, motorsport vehicles like very expensive Lamborghinis, and even old time farm and military equipment. Essentially, if you have a piece of machinery that once acted as a means to transport people, a collector car insurance company will most likely insure it.
What Do You Get With Collector’s Insurance
With the exception of to the “Agreed Value” stipulation, a Classic car policy is essentially a regular auto policy. You buy a liability aspect of it, should you get into an at-fault accident, as well as a vehicle damage aspect. The vehicle damage aspect takes the form of collision and comprehensive insurance which is the most important part of the policy. Those two will work to pay for damages to your car that are caused by ‘acts of god’, in the case of comprehensive, or accidents you caused yourself in the case of collision.
With a collector car policy you also get roadside assistance, including towing, should your car ever break down on the road. Another important coverage is “spare parts” coverage, which will replace any parts of your vehicle should they be damaged or stolen up to a certain amount.
Who Can Get Collector Car Insurance?
The requirements for this type of insurance are a bit more stringent than a normal policy. Usually you need to be at least 25 years old, and have had a clean driving record for at least five years. Furthermore, you will most times need to have a primary vehicle which you can declare as your daily use vehicle, your collector car will have to be garaged in a secure area, and it also has to be in driving condition.
You cannot use your collector car too often. Most companies will only insure your car up to 7,500 miles at most, and that’s only driving it at most once or twice a week. If you plan to use your collector car as your main means of transport, it will be very difficult to get it insured.
How Much Does it Cost?
Classic car insurance is generally always cheaper than regular car insurance policies since you are using it less often. Still, that is not a steadfast rule. If you insure a car that is worth hundreds of thousands of dollars, the collision and comprehensive premiums may be greater than your policy insuring your Toyota Camry. Essentially, classic car insurance companies will dole out prices similarly to regular insurers, but taking into account the minimal usage. Like with regular car insurance as well, there are discounts that you can apply for.
Who Has the Best Collector Car Insurance?
Most large insurers do not themselves offer this type of insurance, but rather have partnerships with companies who do. For example, Progressive backs Hagerty, while American Modern is backed by GEICO. We found American Modern to have the best collector car insurance, in terms of overall coverage for collector car enthusiasts. To get the best insurer for you, it will require going through the companies and seeing who provides the best service for the best price. Fortunately, there are not nearly as many companies in this market as the regular auto insurance market.
The article Have a Valuable Car? You May Need Collector/Classic Car Insurance originally appeared on ValuePenguin.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
