For many, car insurance is a necessary evil, but it makes life easier when things go wrong. Before coverage was mandatory, a single accident could have been financially devastating for everyone involved. Replacing or repairing one or more automobiles would have been daunting enough, but paying medical bills would have been difficult, even impossible. For a small monthly premium, though, car owners can do the responsible thing and make sure they’re able to pay in the event of an accident.
For the most part, insuring your car is as easy as putting some information into an online form and providing your credit card or bank information. Insurance premium payments are based on a few factors, not the least of which are what risk factors you fall into and how expensive your vehicle is to repair. For the average car, repair costs are pretty straightforward, depending on how abundant parts are and how complicated the car is to repair. Classic cars are a bit different, though.
So, how do you insure your classic car?
What is a “Classic Car?”
Across the nation, cars are lasting longer than ever, thanks to better manufacturing and more diligent maintenance. Department of Transporation statistics, for example, reveal the average American car is nearly 12 years old. Still, even if someone has a car at the far end of the curve, pushing 25 years, this doesn’t automatically make it a “classic car.” For example, what makes a 1956 Chevy Bel Air a classic car, a 2006 Ford GT maybe a classic car and a 1996 Toyota Camry not a classic car?
Without going into the formal Classic Car Club of America (CCCA) definition, we can say that “classic cars” are “special cars.” Classic cars aren’t necessarily old, and old cars aren’t necessarily classic. Really, the difference is scarcity and perceived value. The ’56 Bel Air was iconic in its day, one of the most recognizable shapes on the road at the time, cementing itself in American automotive memory. Similarly, an ’06 GT, built to celebrate the Ford Motor Company’s 100th Anniversary, exists in only a few places, with just over 4,000 built. On the other hand, the ’96 Camry was a run-of-the-mill sedan, and Toyota made over 350,000 of them that year.
How is Insuring a Classic Car Different?
What makes insuring classic cars different is how its value is perceived. Ordinary car values tend to depreciate every year, which means that the insurance company wouldn’t have to pay as much to repair or replace it. Classic car values tend to increase every year, on the other hand. You can check prestigious classic car auctions for that proof.
So, how do insurance companies treat classic cars? The truth is, it depends on how you approach the subject with your insurance broker. It’s safe to say, however, that it would be a mistake to put the ’96 Camry on the same policy as the ’06 GT or ’56 Bel Air. The Camry might be your daily driver, but it loses value every year you drive it. The GT and Bel Air, which you only drive on nice summer days and put on blocks the rest of the year, keep appreciating in price because they’re special, recognizable and rare. You want an insurance company that appreciates the difference.
Insurance for a classic car will take more time and isn’t as straightforward as obtaining a policy for an ordinary car. Part of getting the right coverage for your classic car will likely start with an appraisal and looking for an insurance company that specializes in classic cars. Hagerty, JC Taylor and American National are a few specialty providers, and most specialty carriers also underwrite for major providers, such as Geico, Progressive and State Farm.
It’s easy to see the payoff when you understand the difference between “ordinary” and “classic” cars, and the insurance policies that cover them. First, classic car insurance will cover the value of your car as a classic, not just an old car. For example, a regular insurance policy might treat your ’56 Bel Air as an old car, and maybe you’ll get a couple thousand if you wreck it. On the other hand, if you wreck your immaculate Bel Air on a weekend drive, a classic car policy would reimburse you the appraised $100,000 value, a guaranteed amount agreed upon at signing.
Interestingly, despite the greater coverage classic car policies offer, they usually require lower premiums, sometimes 20 to 40 percent less than regular car insurance. This is because classic car insurance providers know their owners and classic cars are a lower risk than regular cars. Classic car owners take better care of their cars, typically keep them off the roads in bad weather, don’t travel as many miles, and drive them more carefully. Therefore, classic car owners are a safe bet for insurance companies covering their rides.
If you own and drive a classic car, regardless of whether it has plates on it all year, it would serve you well to keep it covered by a comprehensive classic car insurance policy. Take the extra steps to look for a good provider, and relax in the knowledge that your investment is covered.