What Does Classic Car Insurance Cover for Classic Car Owners

Classic car insurance is designed to protect your prized possession from financial loss due to accidents, theft, or other unforeseen events.

The average cost of classic car insurance varies depending on the type of vehicle, its age, and the level of coverage chosen. For example, a 1969 Ford Mustang might cost around $800 per year to insure.

Classic car owners often have a strong emotional attachment to their vehicles, which can make it difficult to part with them, even in the event of a total loss. Fortunately, classic car insurance policies typically offer a total loss settlement option, which allows owners to purchase a replacement vehicle or receive a cash settlement.

Classic car insurance also covers damages to the vehicle from natural disasters, such as floods or hail storms. In fact, according to the article, 75% of classic car owners have experienced some form of damage to their vehicle from a natural disaster.

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Classic car insurance covers more than just the basics. It protects your vehicle's value by using agreed value coverage, which doesn't factor in depreciation.

This means that if your classic car is totaled, the insurer will pay out the agreed value (minus the deductible), which can be higher than the actual cash value. For example, if you bought a car for $30,000 and it's valued at $24,000 a year later, the agreed value might be closer to the original purchase price.

Specialized insurance policies also consider the vehicle's special usage and offer customized endorsements. This could include coverage for road trips or show events, which can be a big part of owning a classic car.

Classic car insurance may lead to a higher insurance payout in the event of a total loss, since depreciation isn't a factor. In 2023, the average value of a two- to six-year-old vehicle declined about 20%, according to data from Black Book and Fitch Ratings.

When choosing a classic car insurance policy, it's essential to consider your policy limits carefully. Your policy limits should match your usage and the condition of the car.

If you plan to drive your classic car frequently, a policy with mileage limitations may not be suitable. For example, a policy with a 5,000-mile annual limit might not be enough if you drive your car every weekend.

Consider your deductible options, including the amount and whether it applies on an annual or per incident basis. This will help you understand how much you'll need to pay out of pocket before your insurance kicks in.

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To be eligible for classic car insurance, your vehicle must meet certain requirements. You'll need to prove that it's at least 25 years old, or it falls into one of the following categories: modern muscle car, exotic, or modified vehicle.

Classic car insurance companies usually require something special about the vehicle, such as an old age, a high value, or some customization. To qualify, your car must be in good condition and parked in a secure and fully enclosed garage, carport, storage facility, or other approved structure.

You won't be able to use your classic car for daily commuting, racing, or high-risk activities. In fact, most policies strictly forbid running errands in your classic car or driving it to work while your regular vehicle is in the shop.

Here are the key requirements to keep in mind:

These requirements may vary slightly depending on the insurance company, but they give you a general idea of what to expect.

Storage Requirements can be a bit tricky, but it's essential to get it right to qualify for coverage. Keeping your car in a covered, locked garage or storage facility is preferable to parking on the street or in an uncovered driveway since it's protected against inclement weather and theft.

You'll need to meet the basic storage standards set by your insurance provider, so be sure to check their specifications before signing your policy contract. If you can't meet these requirements, your coverage may not be valid.

Agreed Value Coverage is a key feature of classic car insurance. It's a more favorable option than actual cash value coverage, which can leave you with a lower payout than you expect.

Classic cars tend to hold their value or even increase it over time, unlike regular cars that depreciate significantly. For example, the average value of a two- to six-year-old vehicle declined about 20% in 2023.

This means that if you have a classic car insured with agreed value coverage, you'll receive the agreed-upon value minus your deductible in the event of a total loss. That's a more substantial payout than what you'd get with actual cash value coverage.

If you make significant improvements or modifications to your classic car, be sure to request a new valuation to reflect the upgrades. This will ensure your agreed value coverage stays in sync with your car's increased value.

Your policy limits should match your usage and the condition of the car. For instance, if you plan to drive your classic car every weekend, a policy with mileage limitations may not be suitable.

Consider your deductible options, including the amount and whether it applies on an annual or per incident basis. This is the amount you'll need to pay out of pocket before your insurance kicks in.

A policy with a deductible that applies on a per incident basis might be a good choice if you're a safe driver.

Classic car insurance offers a range of coverage options that cater to the unique needs of classic car owners. One of the main benefits is the availability of specialized coverages that go beyond standard car insurance policies.

Specialized coverages include increased replacement cost, which pays the difference between the agreed value and actual value if your car's value increases. Roadside assistance is also available, including towing with a flatbed truck only to prevent wear and tear during transport to a repair shop or back home.

Other specialized coverages include auto show medical reimbursement, which covers injuries sustained at an exhibit or event featuring your car. No attendance required coverage provides protection when your vehicle is being displayed, such as at a car show, even if you're not there.

Classic car insurance companies also provide spare parts coverage, which covers damage or theft of spare parts, such as tires, valves or other gear, as part of a covered incident. Additionally, cash settlement option allows you to take a cash payment if your car is totaled or stolen, with no requirement to repair or replace your vehicle.

Here are some of the key coverage options offered by classic car insurance companies:

Classic car insurance companies also provide the most common car insurance coverages, such as liability, personal injury protection and uninsured motorist, as well as comprehensive and collision.

Companies offering classic car insurance often have specialists who handle claims for repairs or replacement of a unique or rare vehicle.

These adjusters have a deep understanding of the classic car market and restoration processes, which ensures the vehicle is restored to its pre-loss condition.

They work closely with owners to ensure authentic parts and expert craftsmanship are used for the repair or replacement.

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When dealing with a classic car insurance claim, having access to expert claims service can make all the difference. Companies offering classic car insurance often staff specialists who are prepared to help with claims for repairs or replacement of a unique or rare vehicle.

These adjusters have a deep understanding of the classic car market and restoration processes. They work closely with owners to ensure the vehicle is restored to its pre-loss condition, using authentic parts and expert craftsmanship.

Collector car insurance is generally very affordable, possibly costing around one-third of what you might pay for regular auto insurance.

Coverage for collectible vehicles is calculated similarly to common auto insurance, but since you drive much fewer miles every year and are likely to keep the vehicle sheltered and in good condition, it's less expensive.

Some car insurance discounts available on standard policies also apply to collectible car insurance and vary by company.

Having multiple policies with the same carrier can qualify you for a discount.

Insuring more than one classic vehicle can also get you a discount.

A clean driving record with no accidents or claims in the past few years can earn you a discount.

Equipping your vehicle with an anti-theft device can also qualify you for a discount.

Completing a defensive driver class can help you save money on your insurance.

Selecting a comprehensive-only policy, which is ideal for owners who plan on restoring but not driving an automobile, can be a cost-effective option.

Here are some common discounts that may be available:

Your policy limits should match your usage and the condition of the car. For instance, if you plan to drive your classic car every weekend, a policy with mileage limitations may not be suitable.

A deductible of $500 or more might be a good option if you can afford it, as it will lower your premiums. However, be aware that you'll need to pay out of pocket before your insurance kicks in.

Consider your policy's mileage limitations, such as 5,000 miles per year, to ensure it meets your driving needs. If you plan to drive more, you may need to opt for a policy with higher mileage limits.

Some classic car insurance policies offer restoration coverage, which is a must-have if you're bringing a tired old vehicle back to life. For example, Hagerty offers a Vehicle Under Construction plan that boosts your guaranteed value 10% per quarter during restoration.

Agreed value policies are a good option for collector cars, as they guarantee you'll receive the agreed-upon value if your car is totaled, minus your deductible. However, be sure to check the fine print to ensure you understand the terms.

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Classic car insurance offers a range of benefits and extras that make it a great option for car enthusiasts.

Specialized insurance policies cater to classic car owners by protecting the vehicle's value and ensuring repairs are done correctly with the right parts.

Hagerty is a great choice for classic car extras, offering a range of unique features like the ability to insure "automobilia" and join the company's Drivers Club.

Classic car insurance companies also provide specialized coverages, including increased replacement cost and roadside assistance.

Roadside assistance includes towing with a flatbed truck only to prevent wear and tear during transport to a repair shop or back home.

Other benefits include auto show medical reimbursement, no attendance required, spare parts coverage, and a cash settlement option.

Here are some of the specialized coverages offered by classic car insurance companies:

Classic cars come in all shapes and sizes, but most insurance companies agree on what defines a classic vehicle. Classic cars are typically defined as 19 to 24 years old, restored, in good working condition, and greater in value than other autos of the same make and model year.

The Classic Car Club of America takes it a step further, considering vehicles manufactured between 1915 and 1948 as classic. This is a great example of how different organizations may have slightly different definitions.

Some classic cars are also considered antique cars, which are at least 25 years old and in good working original or original restored condition. In some states, an antique car only needs to be 20 years old, while the Antique Automobile Club of America requires a car to be at least 25 years old.

Modified cars, on the other hand, have undergone significant changes to their engine, body, chassis, or interior, which can either increase or decrease their value. Unfortunately, many insurance companies won't provide collectible insurance for these types of vehicles.

Kit cars and replicas are also considered classic cars, as long as they're at least 24 years old and made up of separate manufactured components. Here's a breakdown of the different types of classic cars: