classic car insurance

When Do You Need Classic Car Insurance?

If you own an older car that holds a special place in your heart, you may need classic car insurance. This coverage combines auto insurance and art insurance to preserve and protect automotive showpieces.

This hybrid approach protects your pearl from the usual hazards of the road. It also saves money by acknowledging that you drive it occasionally and with great care.

“That is one of the main reasons that people bring specialty vehicles of whatever sort to us – because their usage is very limited, they are passionate about these vehicles and we guarantee their value,” says Shannon Gillespie, an agent with family-owned specialty insurer Hagerty.

What makes a car a classic?

Traditionally, vehicles over 20 years old have been considered a classic. Those over 45 years old were antique. And cars built between 1919 and 1930 were vintage. But those age ranges, while practical in the last century, have expanded in this one.

“Back in the day, if a car was 25 years old, you considered it a classic or collectible. In the 1950s, ’60s and ’70s, production numbers were low for any car, so if it was old, then it was collectible,” Gillespie explains.

“The age limit doesn’t necessarily hold true anymore. We write policies for special interest or exotic vehicles, newer cars with limited production, and ’80s or ’90s vehicles that are modern classics. Just because a car is a certain number of years old doesn’t make it collectible, or not collectible if it’s a newer car.”

ALSO READ: Do You Need to Insure a Car You Don’t Drive?

Traditional vs. classic car insurance

These common and quite unconventional threads distinguish classic car insurance from the street variety:

Lower Premiums: Depending on the classic car underwriter, you may be eligible to save up to 40 percent on premiums if you don’t use your car to commute, but display it at car shows.

Agreed/Guaranteed Value: Unlike regular car insurance (where the actual cash value or stated value coverage may be less than the value of your car in the event of a claim), you receive a guaranteed value from a classic car insurance policy. The insurer pays that amount in the event of a covered loss, regardless of market depreciation.

“Our risk exposure is quite low because our customers do take such good care of them. These are their babies,” Gillespie explains. “That guaranteed value is one of the main differences with standard policies.”

Deductible Waiver: If your joy ride gets damaged beyond repair, your deductible for a classic car insurance policy is waived.

Flexible Usage: Classic car insurance places no mileage limits on how you choose to enjoy your vehicle.

Optional Cash Settlement: You can choose a cash settlement if the damage to your classic car is more than half of its agreed value.

Inflation Protection: Unlike ordinary cars, most collectibles tend to appreciate rather than depreciate over time. Some classic insurers automatically increase the value of your collectible by a certain percentage every quarter or year. That allows your policy to keep up with your vehicle’s worth.

Additional classic car insurance options include:

  • Spare parts coverage
  • Emergency roadside assistance
  • Trip interruption
  • Auto show medical
  • Veterinary coverage (in case your pet gets injured riding in your collectible)

Driver and mileage restrictions for classic car insurance

In the interest of managing risk, some classic car insurers request that you don’t use your beauty for daily commutes. Nor can you let anyone under age 25 drive it. Commuting would put your prize ride in the middle of more traffic, and younger drivers are statistically more likely to get into an accident.

However, leading classic insurers make these adjustments by factoring mileage and youth drivers into their underwriting or they require a second daily-use vehicle. That helps to avoid the awkward appearance of discouraging collectors from fully enjoying their pastime. Gillespie says they squelch the use of deductibles for the same reason.

“Typically, we write the policies with a zero deductible. That’s because we want to make sure that a painful situation (a claim) is as painless as possible,” she explains. “Because some of these vehicles make people cry, they have such a different connection to them than to regular-use vehicles. We do require that they have regular-use vehicles in order for us to write a policy. That makes sure these vehicles aren’t used as a backup or daily driver. But they’re cars; we want to make sure that people enjoy them.”