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In many ways, insurance for classic cars travels down the same path as insurance for regular cars. But there are a few key lane changes, including potentially lower premiums for classic auto insurance.
What is a classic car?
People have different opinions on what is considered a “classic” or “collector’s” car, but the term often refers to a vehicle made in 1990 or earlier. Examples of classic cars include the 1932 Ford Roadster, the 1957 Corvette, the 1969 Camaro, and the 1978 Pontiac Firebird Trans Am.
A variety of types of vehicles can fall under the umbrella of the classic car, such as:
- Old cars
- Classic military vehicles
- Custom cars
- Exotic cars
- Muscle cars
- Racing cars
How does classic car insurance work?
An insurance policy for a classic car is very similar to an insurance policy for a regular car. A typical auto insurance policy can provide liability coverage, uninsured and underinsured motorist coverage, personal injury protection, and medical payment coverage.
Related: Compare auto insurance rates with EverQuote
But classic auto insurance goes in a different direction when it comes to collision and comprehensive coverage, both of which cover damage to your own vehicle. Unlike a regular car, collision and comprehensive coverage for a conventional car is normally based on the “agreed value” of the vehicle.
- Collision coverage covers damage to your car if you hit an object such as a telephone pole or other car.
- Comprehensive coverage covers damage to your vehicle from inclement weather, fires, explosions, floods, and other issues. In addition, it covers car theft and damage caused by collisions with deer and other animals.
If you are purchasing full and collision coverage for a classic car, you will generally want to use an agreed value (or warranty) for the vehicle. This is a dollar amount agreed upon between you and the insurer regarding the policy value of your classic car. The agreed value is paid if the vehicle is a total loss, less any deductible.
Regular cars are generally covered for “actual cash value,” which is the depreciated value of the vehicle at the time of the accident. Since many types of classic cars increase in value over time, the standard “true cash value” policy is not the right type of coverage.
When you buy conventional car insurance, you and the insurer arrive at an agreed value based on factors such as:
- Current market value
- Replacement cost
- Cost of special parts
Another major difference between classic auto insurance and regular auto insurance is that the premiums to cover a classic car can often be lower. Why? Because you will drive less of a classic car than an everyday car.
For example, the insurance of a 1957 Corvette, in good condition and driven only occasionally, is $ 427 per year with Hagerty Insurance for a good 50-year-old driver in California. The same driver, with a daily commute, would pay around $ 2,300 to insure a new Toyota RAV4.
How to qualify for classic car insurance?
Just because a car was manufactured in 1969 doesn’t automatically mean you can get classic car coverage. Several factors can affect your ability to purchase classic car insurance:
- How much the car is driven. If you want classic car coverage, you may not be able to regularly commute to work, run errands, or pick up the kids from school. A classic car policy can limit the number of kilometers you can drive in a year.
- Where the car is stored. When you are not showing your classic car, it will likely need to be stored in a locked, closed private structure like your garage or storage unit. Some insurers may allow you to park a vintage car under a carport, in a parking garage or in a driveway.
- Your driving record. If you’ve racked up a lot of speeding tickets, a driving conviction, or other serious driving offenses, you may not be able to purchase regular car insurance.
- The condition of the car. Some insurers may not offer insurance for classic cars that are in poor condition or have been damaged.
If you are unable to purchase conventional auto insurance, you may be able to purchase a standard auto insurance policy to cover your conventional commute. But with a standard policy, the insured value of the car may be less than the actual value.
John Egan is a freelance writer, editor and content marketing strategist in Austin, Texas. His work has been published by Experian, Bankrate, National Real Estate Investor, US News & World Report, Urban Land magazine, and other media.