What You Need to Know About Classic Car Insurance
July 6, 2020 (Investorideas.com Newswire) Owning a classic car is a dream for a lot of car lovers. Whether you own a Ford Mustang 289 HiPo or a Ford Mustang 390 GT, it's helpful to know about proper insurance. As important as it is to maintain the look and function of a classic car, it's equally important to ensure you have protection for your investment. Here's everything you need to know about getting classic car insurance.
What's classic car insurance?
When you get conventional car insurance, the car is usually covered up to the actual cash value. That equals its replacement cost minus the depreciation. An example of this would be purchasing a Dodge Challenger for $22,000, and getting a cash reimbursement of about $14,000 if you got in an accident and totaled the car. Classic car insurance covers your vehicle for a guaranteed value that you and your car insurance company agree on. The amount is determined either by collectible car valuation guides, a form of documentation, research done by an underwriter, or a professional appraisal. Once you have classic car insurance, if you and a car insurance company came to an agreement that your Ford Mustang 289 HiPo should be valued at $50,000, you'd receive that amount in the event you totaled the car. Unlike modern cars that lose value over time, collectible cars usually increase in value based on how they are restored and taken care of.
Collectible car insurance types
While different collector car insurance policies tend to be similar, some types of collectible vehicles are excluded from certain coverages. There's variation when it comes to the descriptions and definitions with different insurers and different states. Nonetheless, there are a few common ones that most insurers offer. Classic car insurance generally refers to cars that are 19 to 24 years old, in good working condition, restored, and higher than the average value of other cars that are of the same make and model year. In some cases, insurers will define a car as classic if it's at least greater than ten years old. The Classic Car Club of America's definition of a classic vehicle is one that was manufactured between 1925 and 1948.
Companies typically offer antique car insurance for cars that are at least 25 years old and is restored to its original condition. Keep in mind that in a few states, if the car is at least 20 years old, it can qualify for this type of insurance. The Antique Automobile Club of America only views cars as antique if they're 45 years old or older. Modified car insurance is an option if your classic car is significantly altered from its original condition. A lot of insurers won't provide classic car coverage for vehicles altered in this way. An example would be an antique car that runs on nitro fuel. Another common collectible car insurance you might consider is kit cars and replicas. This insurance covers cars that either represent the assembled reproductions of all cars that are at least 25 years old, or are representation automobiles at least 24 years old and have separately manufactured components.
What does a collectible car insurance offer?
Most classic car insurance offers a term of about 12 months and covers for collision, liability, uninsured and underinsured drivers, and medical payments. State-mandated liability coverages are given to collectible cars and private passenger vehicles. As it relates to optional coverage, there are some unique options given specifically to classic cars. Classic car insurers may offer roadside assistance where towing is only done with a flatbed tow truck to avoid the potential of wear and tear. Traveling coverage can also be offered, which can cover food, a rental vehicle, lodging, and personal items when your collectible car breaks down.
Additionally, you might have the possibility of getting an auto show medical reimbursement. This option would cover you if someone were to be injured at an event or exhibit that features your car. It's similar to medical payments of a part of homeowner's insurance policy, where the policy pays medical expenses to the limit, no matter who's at fault. If someone were to slip and fall at your exhibition space, the auto show medical reimbursement option would protect you.
You also might be able to get no attendance required coverage and coverage for spare parts. No attendance required covers your vehicle when you're away from it when displayed at a car show. An example would be if a dealership uses your vehicle in an event, and it were to get damaged, it would be covered. Coverage for spare parts would cover backup parts for the car if they were damaged or stolen. You should lastly be aware that you can negotiate the agreed value of your car if you believe the estimate of its worth has risen. An example of it rising would be if you recently restored the car, and you desired to protect how much you've invested in it.
Classic car insurance eligibility
In general, insurance companies require that you don't use the classic car as your primary vehicle. There are also maximum annual mileage restrictions that are applied. The number varies from state to state, but it usually isn't more than 7,500 miles per year. Many policyholders are limited to only driving the car for pleasure or hobby activities such as car shows, parades, or exhibitions. Most insurers won't cover your claim if you use the classic car for driving to work, shops, or other locations. You also need to be at least 25 years old, have a good driving record, and 5 to 10 years of experience.
At most, insurers allow you to have one at-fault accident or moving violation within the last three years. Insurers will expect that the car is safeguarded from the elements by being parked in a fully enclosed garage, storage facility, or other approved structure. You'll also have to own another vehicle as your primary car for regularly driving to school, work, or other frequent locations. You may additionally have to agree not to race with your classic car or drive it on a track. Your classic car needs to be in good shape and intended for normal driving. Insurers can potentially decline to cover you if your classic vehicle is previously damaged, in poor condition, or designed for off-road use.
Insurance costs and discounts
The coverage for collectible vehicles tends to always be less expensive than conventional car insurance. The reason is that these vehicles are driven much fewer miles every year, and owners are more likely to shelter the vehicle and keep it in good condition. Nonetheless, premiums are still calculated based on similar factors to more common car insurance. You may also be able to receive discounts with the insurer you choose for certain circumstances. Those circumstances can include having multiple policies with the same carrier, insuring multiple classic vehicles, equipping your vehicle with an anti-theft device, or completing a defensive driver class. You might also qualify for a discount if you have no claims or accidents within the last few years, or if you choose to select a comprehensive-only policy, which is beneficial for classic car owners who plan to only restore their car and not drive it.
How to shop for classic car insurance
Both major insurance companies such as Progressive and specialty carriers such as Hagerty offer coverage for classic vehicles. A good place you can start in your search for a provider is your existing car insurance. As mentioned in the previous section, they may offer you a discount for insuring multiple vehicles with them. Nonetheless, before you decide to choose your existing carrier, it isn't a bad idea to shop around and contact different carriers to compare rates and coverages. There are a few things you should keep in mind with finding the right coverage that fits your needs. First, you should start preparing to substantiate the current value of your classic car. Take photographs, consult industry price resources, and perhaps get your vehicle professional appraised. Figuring out an accurate worth will help you avoid getting shortchanged.
Additionally, choose an agent and carrier that's experienced in classic car insurance. Look for a company that has an in-house claims department, which potentially can make it easier if you ever have to file a claim. Be sure to pay close attention to the fine print. Know exactly what's covered and what's restricted. Anything you don't understand, ask the agent to explain it to you. You should review all limited use provisions. Insurers will generally allow travel to auto club meetups and car shows, but some insurers may restrict it. You should check to see if your insurer has any travel restrictions.
It can be the dream of a lifetime to own a classic car, but not having classic car insurance can quickly turn that dream into a nightmare. Keeping all of this information in mind will help you choose the right classic car insurance for your vehicle. If you happen to have a classic Mustang and want to know more about parts you could use to restore it, you can learn more at Revology Cars.
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