Classic Car Insurance vs. Regular Auto Insurance
Written by Mike Wilson on November 24, 2017
There are a few very important differences between regular car insurance policies and those for classics and other collector cars. For those vehicles, what you buy is known as a specialty insurance policy - one that both you and your car has to qualify for. How do you know if you both qualify? Simply check out the following requirements:
What qualifies a driver for classic car insurance?
Most drivers who already have auto insurance will qualify for classic and collector car insurance if they have a good driving record. Usually, you will have to be a licensed driver for a specified number of years, typically ten years. If you have a clean driving record going back at least 6 years, you should have no problem qualifying. You will need to show proof of insurance on another vehicle - your daily driver - to guarantee that your classic car will not have to handle those duties.
What qualifies a vehicle for classic car insurance?
Insurance companies have varying qualifications for your vehicle to meet as a classic or collector car. For classics, some insist your car must be 25 years old, while others accept 15 as the required minimum age limit. Collector cars, on the other hand, could be modern collectibles that are rare and/or limited in number. There may be other limitations as well, such as, certain modifications being unacceptable, and in the case of collector cars, depending on their desirability and production numbers. But generally, vehicle age is the primary qualifier.
If both you and your car qualify for a classic car or collector car insurance policy, moving forward, there are some significant advantages as well as limitation requirements you should be aware of. And keep in mind, the guarantees you agree to, when setting up your policy, will dictate the rates your insurance will cost based on how you wish to use your classic or collector car.
Vehicle Usage Limitations
Almost all classic and collector car insurance policies have specific limitations on what you can do with your car. For example, your policy may restrict certain kinds of events and activities you can participate in. Any competitions that involve performance, such as racing or timed events, will be off limits for almost all policies. Your car also cannot be used for daily transportation, driving to/from work and running errands. However, your car is still meant to be driven around and enjoyed. Hobby use, such as car shows and cruise nights, are permitted.
There may, of course, be specified limitations on who, besides you, can drive your car.
Storage and Transportation Limitations
Depending on age, restoration level, and valuation, there may be limits on how the vehicle is stored and transported. It will almost certainly have to be garaged for storage. Where the vehicle is temporarily parked might also be limited.
However, please remember that your coverage and premium rates can be tailored to the way you want to use your classic or collector car. Stipulating some of these might cost a little more, but you will be able to use your car the way you want to and still have the insurance protection you need.
The differences between regular car insurance and classic car insurance don’t end here. There are other variables involved as well:
Policy costs are based on risk
Most things associated with classic cars are more expensive than usual, but insurance is an exception. There are good reasons for that. Collector cars are valued possessions that owners take special care of. They’re not to be used as daily drivers, and since accident risks are reduced because of that, the cost of insurance is also less.
Any other guarantees you specify in your policy also emphasize the fact that this is a highly protected vehicle, not subject to normal traffic, parking, or weather-born risks.
Regular vehicles driven in normal daily use are valued for insurance purposes according to initial purchase price and depreciation based on the age of the vehicle. This is the “actual cash value” of the vehicle. This formula does not work very well for classic and collector cars as they can actually appreciate in value over time. Instead of using this depreciation-based "book value", a “guaranteed value” is determined and agreed upon when your policy is set up. A 25-year-old coupe that has been restored and pampered as a classic car, therefore has a far greater monetary value than a similar unrestored car used as your daily driver for trips to work, supermarket, or restaurant.