Classic Car Insurance
If you’ve ever seen a car show in your area, which floods the streets with all sorts of old makes and models, you might make the assumption that they are all collector cars. As it turns out, older automobiles are actually categorized as one of three different types of cars: antique, collector and classic – and each one has its own type of car insurance. Here’s everything you need to know about classic car insurance.
What is a Classic Car?
According to the Classic Car Club of America, a classic car is defined as a “fine” or “distinctive” automobile – American or foreign built – manufactured between 1915 and 1948.” (In other words, they are older than antique cars.) A classic car was high-priced when first made and only manufactured in limited quantities. Other factors, including engine displacement, custom coachwork and luxury accessories, such as power brakes, power clutch, and “one-shot” or automatic lubrication systems, help determine whether a car is considered to be a classic or not.
A full list of cars deemed to be classic is provided on the Club’s website. Keep in mind, though, that individual insurance companies may differ somewhat on which cars they include under their classic car insurance coverage. If your car doesn’t qualify for classic car insurance, you may qualify for antique car insurance or collector car insurance.
Why Do Classic Cars Require Special Insurance?
Classic cars, along with antiques and collectors, are not your average vehicle. In addition to being from a different era, they do not follow the typical path of a standard car’s value. Whereas your everyday car depreciates practically the moment it leaves the car lot, a classic car (if kept in good condition) will actually rise in value.
Because of the lack of depreciation, the manner in which standard cars are insured does not apply to classic cars. With a standard car, the insurance company agrees to a “Stated Value” less depreciation, in the event that the car is stolen or damaged beyond repair. With classic cars, you would use an “Agreed Value”, which does not include depreciation. Both you (the insured party) and the insurance company must agree to the Agreed Value, before you can insure the vehicle. (And depending on the insurance company and the make of the car, they may also require an independent appraisal).
There’s another reason that classic cars need their own insurance: the cost of repairs. Repairs are particularly expensive for these vehicles because many of the parts are not mass-produced or easy to source. For this reason, classic car insurance typically comes with a “Spare Parts” coverage.
How Classic Car Insurance Works
As explained above, two types of coverage are unique to classic cars: the Agreed Value and the Spare Parts element of the policy. Other than these two factors, classic car insurance works just like standard car insurance. It includes the typical mandatory and optional coverage, such as:
- Third-party liability (mandatory): Protects you if you injured or kill someone, or damage their property.
- Accident benefits: Covers medical and rehabilitation expenses if you’re injured in an accident, as well as potential loss of income and funeral costs if needed.
- Comprehensive: Covers the cost of repairs if your vehicle is damaged by other events, such as fire, theft and falling objects.
How to Qualify for Classic Car Insurance
Before you can get classic car insurance, you must meet some basic requirements:
- The insurance company must recognize the vehicle as a classic.
- You generally must have a very good driving record, with no convictions for serious traffic offences.
- You can only use the car for occasional, pleasure driving. This means it cannot be used as a day-to-day vehicle.
- Depending on the insurance company, you may be required to store the car in a garage or other approved storage facility when it’s not in use, in order to lessen the chances of theft, damage or wear.
How Much Does Classic Car Insurance Cost?
You may be surprised to hear that classic cars are usually cheaper to insure than regular cars; this is due to the fact that they are used very infrequently, and owners tend to keep them in very good shape. It’s a fact that well-maintained cars are safer cars.
Who Offers Classic Car Insurance?
You can purchase classic car insurance from either a large insurer that deals with these cars (some do, some do not), or a smaller insurance company that specializes in classics, collectors and antiques. When you get a quote on our site and make contact with the insurance company, make sure one of the first questions you ask the company is whether or not they insure classic cars.
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