Classic car insurance coverage

classic car insurance coverage

One of the most important questions that comes to mind hen we talk about classic vehicles whether we are discussing insurance coverage or not is when is a vehicle considered classic and not just an “old car”?

the answer to this question could also help determine when you need to obtain a classic insurance policy instead of simply insuring your “old vehicle” on a regular auto policy.

The Classic Car Club of America defines a classic car as “an automobile manufactured from 1915 to1948”. As you can see, this definition is very specific. However, most of us use terms like classic, vintage and collector cars as the same term for vehicles manufactured as recently as the 1980s.

Do insurance companies stick to this definition by the  Classic Car Club of America? The answer is simply no.

Insurance requirements for classic vehicles

Insurance companies use different definitions for different terms defining classic vehicles.. Most insurance companies use the term Classic vehicle to refer to vehicles that are 10 years old or older and has been restored and maintained.

The term Antique vehicle usually refers to a vehicle that is 25 years old or older and has been restored and maintained.

Sometimes, the term Replica is used to refer to vehicles that are a reproduction of an antique vehicle but the motor itself is 25 years old or older.

Insurance companies also focus on the use of the vehicle to determine if it is a classic vehicle or not. Most insurance companies require the vehicle has a limited use. This means that the vehicle is usually driven for special events like parades, classic shows and classic club activities.

Some insurance companies will require you to list the number of miles the vehicle is driven. This means that most companies will not insure a vehicle as a classic vehicle if it is driven for daily use and commute or if it is used for business.

Some companies go as far as requiring the driver to have a primary use vehicle insured on a regular policy before he or she could obtain a classic auto policy and require the vehicle to be stored properly (locked in a  garage rather than parked on the street).

Classic auto coverage

A classic auto policy coverage limits and options are mostly similar to those of a traditional auto policy. This means that the policy will facilitate coverage for liability, property damage, uninsured motorists coverage, personal injury protection, comprehensive, collision … etc

However, the main reason most classic vehicle owners and collector prefer a classic auto policy is because of the additional coverage options that could only be purchased and added under this special type of policy. These coverage options include:

  • Disabled vehicle coverage: this coverage includes different added coverage with different companies. The most obvious coverage here is roadside assistance and towing coverage. Most classic auto policies offer a flat bed towing option for better care and safety of a valuable classic car. This coverage sometime also includes trip interruption coverage (hotel and meals if your vehicle broke down and you cannot make it home)
  • Tools coverage: this optional coverage usually facilitates coverage for the tools used to restore and maintain your classic vehicle. Some insurance companies also include spare parts coverage under this option.
  • Automobilia coverage: this covers ornaments and memorabilia used to decorate a classic vehicle such as vintage license plates, hood decorations … etc
  • Salvage vehicle coverage: this is one of the most important coverage options available as it allows the owner to keep the classic car after a total loss and getting paid for the total loss as well. This is especially important here because classic vehicles usually have a sentimental value for their owners who would prefer to keep them after a total loss.
  • Restoration coverage: this allows the vehicle owner to keep increasing the coverage value of the vehicle while being restored and its value increases. Hagerty for ex offers a 10% additional coverage increase per quarter up to $25,000 total This is referred as a “Vehicle under construction coverage” by Hagerty.

How to determine the coverage amount of a classic vehicle?

Most classic insurance companies offer two coverage options for classic car owners:

  • State value: this allows the insured to determine how much coverage he or she would like to cover the vehicle for. They state the value they believe they should get in case of a total loss based on the original cost and how much they paid to restore it. This value has to be backed up by documentation, receipts or appraisals
  • Agreed value: this value is usually determined and agreed up on by the insurance company prior to binding coverage on your classic policy. This value could also be backed up by documentation, receipts and appraisals.  However, this documentation must be facilitated prior to binding coverage and could be regularly updated as needed.

If you are thinking of taking advantage of these additional coverage options for your classic vehicle, please contact us and one of our agents will facilitate you with a classic auto policy quote.