What classic car insurance covers – and doesn’t

Classic car insurance, also known as collector coverage, is basically insurance for vehicles that spend a lot of time in the garage.

Have a cherry 1950s Cadillac convertible you take to weekend car shows? Own an antique tractor or exotic sports car? Maybe you’re tinkering with a WWII Army Jeep you scored?

Classic car insurance, one of many specialized types of auto insurance, is what you’ll need to protect your investment.

What is classic car insurance?

Classic car insurance policies recognize the intangibles that make older or special interest cars valuable — typically far more valuable than the day they rolled off the showroom floor. For the insurance to remain affordable, however, classic car insurance also provides less coverage than standard auto insurance. For example, it won’t cover the car if it’s used for regular transportation or is not securely stored. In short, collector car insurance is best for valuable cars that are rarely driven.

What makes a car a collector car?

According to the Insurance Information Institute (III), there is no uniform definition of a classic, collectible or antique car. “If a car’s value exceeds its original selling price, then it might be considered collectible and a candidate for specialized classic car insurance,” says the III. This could include:

  • Antique and classic cars that are more than 25 years old

  • Hotrods, muscle cars, and modified vehicles

  • Exotic and luxury cars

  • Vintage military vehicles, antique tractors and classic trucks

  • Classic motorcycles

Antique and classic cars that are more than 25 years old

Hotrods, muscle cars, and modified vehicles

Exotic and luxury cars

Vintage military vehicles, antique tractors and classic trucks

Classic motorcycles

How is classic car insurance different?

Classic car insurance is similar to standard car insurance in that it offers coverage for property damage and bodily injury liability, up to set amounts and with agreed-upon deductibles. But the similarities pretty much end there.

With classic car insurance, your car must qualify as a collectible and be treated as such, meaning there are limits on where it can be driven and stored. For example, you may have to have a garage.

In addition, while standard car insurance covers a car’s “actual cash value,” which is based on the depreciated value of that make, model and year, classic car insurance policies offer an “agreed-upon value,” which considers the appreciated price that your specific car would fetch at a collector’s auction. Classic car insurance may also pay for specialty repair and towing.

Can you insure a classic car as a daily driver?

No, any car used for regular errands and commutes requires a standard auto insurance policy. Classic car insurance excludes daily driving and typically limits where or how much you can drive the car. Some insurers even require proof that you own another car for daily use.

Classic car insurance is designed to offer affordable insurance for vehicles that would be exceptionally costly to replace. Since daily driving increases the risk of an accident, insurers are able to reduce the cost of collector’s car insurance by limiting usage. In fact, Hagerty, a company that specializes in classic car insurance, uses daily use as a central definition of a classic vehicle, saying, “if it isn't a vehicle you drive for your everyday transport, Hagerty can protect it.”

What is the mileage limit for classic car insurance?

Some insurers set mileage caps with options for 2,500, 5,000 or 7,500 annual miles, and nearly all limit usage to enthusiast meetings and exhibits, tours and occasional pleasure driving, which has the same effect.

Does insurance restrict who can drive a classic car?

Insurers typically sell collector car policies only to experienced drivers with good driving records. This further reduces the risk of an accident and a costly claim. It is common that the named insured must be at least 25, with no moving violations within the last three or five years. Policies also typically require that the owner, as well as all licensed drivers in the household, have a regular-use vehicle with standard insurance.

Is classic car insurance cheaper?

Classic car insurance is typically a good deal cheaper than standard car insurance. By limiting who can drive the car and how much, insurers are able to dramatically reduce the risk of an accident.

Hagerty says its classic car premiums are 34% lower, on average, than daily driver premiums. American Collectors Insurance advertises its classic policies as up to 40% less than standard policies. Bailey Insurance says its collector car policies typically run between $200 and $600 per year unless the car has a very high value, compared with more than $1,000 annually for standard car insurance.

What is stated value insurance?

Stated value is what is used in standard insurance policies. If your car is totaled, the insurer pays the actual cash value of the car at the time of the loss. Actual or stated value does not consider the collector’s value, and older cars are generally worth less and less with each passing year.

Classic cars typically are insured for “agreed-upon value,” which is the amount that you and the insurer agree the car would be worth at auction. If you make improvements to the car, you can negotiate a new agreed-upon value.

How do I get collector car insurance?

Most auto insurance companies offer classic car policies for some types of classic cars, and you may be able to get a multiline discount if you use your existing insurer. But insurance companies that specialize in collector cars are more likely to cover your unique car and to offer a broader array of policy options. These include Hagerty, American Collectors Insurance, American Modern Insurance Group and Grundy Insurance.

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