Is it More Expensive to Insure Classic Cars?

Classic cars offer stylish authenticity like no other vehicle on the market, but many classic car owners (or prospective owners) may wonder what is involved in getting older cars insured. 

Classic car classification differs according to each insurance company standards.  Therefore, it is important to examine each insurance company’s definition of ‘classic’ before taking out a policy.  Several insurance companies will allow classic cars to be added to the standard car insurance policy; however, it is important to understand that doing this may increase the premium substantially.  In addition, in the event that the car gets in an accident or is stole, the minimum amount in the agreed value clause will not apply, which is why opening a specialty insurance policy is beneficial to classic car owners. 

If a claim is made, the market value on the insured car will determine the amount the policyholder will receive.  However, determining the market value on a classic car is often difficult.  The market price for the car is very sensitive and is known to differ as much as 50 to 500% of the market value.  Without having the agreed value clause in place, a classic car that is in perfect condition or is a limited edition will always fall short of getting the full amount that it is worth. Therefore, insurance companies may assign a lesser value to the classic car than the vehicle is actually worth and the policyholder will have to accept it.  Most insurance companies want to pay the least amount possible, especially standard insurance companies. 

It is important to remember that because of the high cost to repair or replace older, classic cars — a comprehensive vintage policy will be required.  The upside to insure classic cars however is the premiums for insuring this type of car is typically less expensive.  The reason the rate is lower is that many classic car owners keep relatively low mileage on these vehicles because this type of vehicle is primarily used for antique car shows.  Therefore, in order to get lowered rates, the insurance company requires the owner to abide by certain guidelines.  For instance, they will assign a mileage cap that the owner must not exceed on the car, the owner is required to take additional security precautions to the vehicle and limiting the amount of car shows that the car is entered into, in order to be covered by the policy in the event of a claim. In addition, classic cars are not regular targets of burglary, for the simple fact that they are easily identified. Another aspect that is important to note is if the vehicle is an unusually rare classic car, it will increase the rates because comprehensive coverage is will be necessary. 

While classic cars are fun to own and drive, they are often expensive to purchase and maintain.   However, classic cars generally require lower premiums because they are often not used as much as standard cars and they are not typically the target of burglary.

Leave a Reply