ANTIQUE AND COLLECTOR CAR INSURANCE
It won’t be long now before the summer Classic Car Shows start. Weekend rides with the vintage cars have already begun. Some have been working on their own classic car, motorcycle, or truck anxious to get out and show it off. Insuring it has likely been low on the list of to do’s. Antique car and classic car insurance should be treated differently from your regular car insurance. If you already have such a vehicle, hopefully you’re already taking advantage of the special insurance coverages and pricing that is available. If you’re new to the collectible vehicle market, this is information you will want to know.
Antique or collector vehicles offer unique exposures and controls over a conventional daily use vehicle. These cars tend to have less exposure to loss because they are not used daily. These cars are usually well maintained, travel locally for special outings, and are operated with a higher degree of care. A select few insurance companies have recognized that reduced exposure and have established a special pricing program for such vehicles.
Besides the cost of your insurance what really makes these programs attractive is that they recognize that the value of your collector vehicle differently from a conventional auto insurance policy; these companies allow you to insure it for its collector value.
After a total auto loss, a conventional insurance company pays you based on the average retail value of your car commonly known as “Actual Cash Value”, “ACV”, or “Book Value”. Included in such a calculation is the depreciated age of the vehicle, its mileage, and maintenance history. Using that system, if a 1973 Dodge Challenger were “totaled”, the ACV would only be a few hundred dollars. If insured through a collector program, the $5,000-10,000 value of the car would have been established at the start of the policy.
What is that vehicle really worth and how flexible is setting that value? Typical used car buying guides such as Kelly Blue Book and NADA deal with a large sampling of specific models of cars sold during a given period. They are not designed to accurately indicate the value of an antique or collectible car. Any insurance company that truly specializes in collectible vehicles offers a valuation method that allows you to cover your vehicle for the value other collectors would pay for it. As with all collectibles, these vehicles are sold based on what the market will bear and the emotions of the buyer. There are collector guides that focus on specific models and years of vehicles. They will reflect a wide variation in value that is affected by condition, how much is original to the car, mileage, and popular features of a given model vehicle such as color, interior, engine size…
Generally special collector guides give a value range for collectible vehicles. Bottom line though, if you request a value that is within the range provided by the collector guides and verified through a couple pictures to document its condition, these insurance companies will agree to that limit. This is known as “agreed amount” coverage.
The annual mileage and usage restrictions are the most common. Most of these programs have annual mileage ranges of: up to 1,500 miles, 3,000 miles, 5,000 miles, or over 5,000 miles. If you drive your collectible over 5,000 miles, it will be cheaper to insure with your other daily use auto insurance carrier but you lose the Agreed Amount valuation for your car after a loss. An antique or classic car is not allowed to be your primary mode of transportation. These vehicles are expected to be driven to car shows, for exercise, and for a special drive on a sunny summer day.
Another common restriction is who is acceptable as a Driver of your antique. The drivers are usually limited to those specifically listed on the policy. They must have 3-5 years driving experience along with a good driving record. Depending on the carrier, their underwriting restrictions may allow wiggle room collectively for only one or two losses or violations for all those listed on the policy. If someone in your household has an unsatisfactory driving record or insufficient years driving experience, the carrier will require you to sign a document waiving coverage should that driver be operating the vehicle at the time of a loss.
Some other restrictions include: The vehicle must be kept in a locked garage; The insured must have a minimum of one daily use vehicle insured with a conventional auto insurance carrier; That vehicle must have liability limits equal to the liability limits proposed on the collector car policy;
When a loss happens, what is your deductible? Most of these programs offer deductibles that range from $0 to $2500. With these special programs, selecting a lower deductible does not have a great impact the rate you will pay.
If you’re buying a car with plans to restore it, is it insurable? These programs do offer coverage during the restoration period. You agree to a value at the start and then change the value after the restoration is completed. When doing so, it is not uncommon to acquire spare parts. Many of the companies offer spare parts coverage as an additional feature to their policies at limits of $500 and up.
Other optional coverages include towing, rental, and trip interruption. They often have broader offerings than available through your conventional auto insurance policy. If your collectible breaks down while attending a show 200 miles from home, you might need accommodations for an extra night or two while you car is being repaired. You might experience increased cost to tow your car home, or simply need to rent a car to get you home. These are all coverages you have the option to include with your collectible car policy.
Many insurance companies will claim to specialize in writing insurance for the classic vehicles. My experience is that a select few companies have programs that reflect this specialty. They include American Collectors Insurance, Classic Car Insurance, Hagerty Insurance, and J. C. Taylor. These companies have similar requirements, coverages and pricing. All of these companies require you to insure for your liability (damage or injuries done to others caused by you) as well as collision and comprehensive coverages (damage done to your car). They all have additional restrictions. If you can live with their restrictions, you could be paying a few hundred dollars annually for the same coverages a conventional insurance company might charge $1,000 or more for.