If you’re a classic car owner, you should consider getting classic insurance. Unfortunately, standard auto insurance policies typically provide insufficient coverage for classic autos. In addition, unlike standard vehicles whose value depreciates with time, classic cars usually become more valuable over time. Here’s more detailed information on this topic.
The Basics of Classic Car
Per the Classic Car Club of America (CCCA), a classic car is any vehicle manufactured between 1915 and 1948. However, the definition of a classic vehicle generally varies from insurer to insurer. If the value of your vehicle exceeds its initial selling price, it could be considered a classic or collectible car, and therefore, may merit tailored classic car insurance. In general, vehicles that warrant classic auto policies include:
- Classic and antique cars (25-30 years old)
• Luxury and exotic autos
• Classic trucks
• Modified vehicle
What Does Classic Car Insurance Cover?
Classic car insurance usually offers standard auto insurance coverage options, including:
- Liability coverage – This coverage covers property damage and bodily injury liabilities. It also covers legal defense costs if you’re sued due to an auto accident you caused.
- Collision and comprehensive coverage – collision coverage covers collision-related damage to your vehicle – for instance, damage caused by a collision with another car or a tree. Conversely, comprehensive coverage covers non-collision-related damage such as damaged caused by extreme weather events, fire, or vandalism.
- Uninsured or underinsured motorist coverage – This coverage kicks in if you’re in an accident caused by a driver who has insufficient insurance coverage or is uninsured. It may also cover hit and run incidents.
On top of these standard coverage options, classic car insurance offers endorsements and add-ons that you can use to customize your policy according to your needs. These include:
- Automotive tools and spare parts coverage covers personal tools and spare parts used to restore or maintain your classic vehicle.
- Cherished salvage coverage – If your classic auto is totaled due to a peril covered by your classic car policy, you can keep the salvaged vehicle and still receive the total payout from the insurance company.
- Disabled vehicle coverage – This coverage covers roadside assistance, which pays for towing and delivery of fuel or oil. It can also cover expenses emanating from trip interruption, such as costs of lodging, meals, and transportation if your vehicle breaks down when you’re at a specific distance from home.
- Vehicle under restoration coverage – This coverage provides periodically increasing coverage for classic cars under restoration.
- Automobilia coverage covers certain collectible items such as vintage license plates, hood ornaments, station displays and gas pumps, automotive literature, and more.
What If Your Classic Auto Is Totaled?
If your classic vehicle is totaled due to a covered peril, you should file a claim with your insurer. However, since the value of classic cars tends to increase over time, you should be aware of the following classic car insurance payout options:
- Agreed value payout option – With this option, you and your insurance company agree on the value of your vehicle based on appraisals and other documentation. Your insurance coverage is then hinged on the agreed value. If the value of your car increases, you can review the agreed value sum during policy renewals.
- Stated value option – This option allows you to state the value of your vehicle (with supporting documentation), and your car is insured based on that stated amount.
However, if your vehicle is totaled, your insurer can choose to compensate you based on your vehicle’s stated value or its actual cash value, whichever is less.