Classic Car Insurance Coverage

November 24, 2017 · Posted in General Articles on Car Insurance 

Learning about the differences between a standard auto insurance policy, and the type of policy that is necessary when insuring a classic car, will be helpful to you, so that you are aware of the limitations associated with insuring classic vehicles. First, you need to be sure that your vehicle can be truly categorized as “classic.” The classification of a classic car will differ from insurance company to insurance company, so you will need to do some research to determine what each insurer’s definition of ‘classic’ is.

It is common for classic vehicles to be permitted on a standard auto insurance policy, although it is likely that insurers will charge higher premiums for this privilege. Also, you will not benefit from what is the biggest advantage of buying specialist insurance, which is the agreed value clause (or the minimum amount that will be paid to you should your car be stolen or involved in an accident or stolen).

Most often, insurers will consider the current market prices of your vehicle in order to calculate how much to pay you for any claim that you file. But this can be difficult when it comes to classic cars, as it is not so simple to figure out their market value. It is common for your vehicle to be valued at less than it is actually worth, and although you may disagree with the insurer’s assessment, you are required to accept the amount that they have come up with.

When it comes to classic cars, the value of a single car model can differ by 50% or as much as 500%, as the market for these types of vehicles is highly price sensitive. If your car is in mint condition, is limited edition or has providence, then without an agreed value clause then there is pretty much no way that you will receive its full value. Keep in mind that insurance companies, especially the well-known ones, are in the business to pay out as little for claims as they can.

In order to take out a classic car insurance policy that includes an agreed value clause, your insurer will ask you to adhere to strict insurance guidelines. For example, these policies often have an annual mileage cap, designed for classic car owners who infrequently drive their cars. Providing extra security measures on your classic car, and attending only a limited number of classic car shows with your car, are a few of the other limitations that may be included in your policy.

The more rare and desirable your car is, the more you will have to pay, however, due to the restrictions often put in place, classic car insurance policies tend to be relatively cheap. The most important feature is the agreed value clause, and if you want to get the insurance policy that you think is best, you may need to pay higher premiums.


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