Classic Car Insurance: What Is It? How Does It Work?
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Classic car insurance provides special coverage options and expert service for classic car owners. These options may not be available from a regular car insurance company.
The most important feature of a classic car insurance policy is agreed value coverage, which means you and your insurance company agree on the value of your car based on an appraisal. Many companies also offer special coverages for things like displaying your vehicle at car shows, as well as services for expert repair of exotic vehicles.
However, classic car insurance policies may come with drawbacks like mileage limits, and only certain cars are eligible.
What is classic car insurance?
There are several services and features that distinguish classic car insurance from an average policy. The most important is agreed value coverage.
In an agreed value policy, you and your insurance company agree on the value of the car you own, which determines your coverage amount. This could be $10,000 to $100,000 — or more. It all depends on an appraisal.
This is different from typical cars. If you have a commonly available car, your insurance company will determine its value based on similar models and the cost to repair it. A classic car is insured more like a piece of art, because its worth is based on what buyers are willing to pay.
The maximum payout on an agreed value policy also won't decrease over time like it would with a typical car: A 2010 Toyota Corolla is worth less now than it was in 2015, so the maximum payout you can receive may change, too.
On the other hand, the value of a classic car might stay the same over the same period: A 1970 Dodge Challenger in good condition might have been worth $30,000 five years ago and the same amount today. The value might even increase over time. You'll have to manually adjust the coverage amount of your policy based on the changing value of your car.
Other benefits of classic car insurance
The other main benefit of classic car insurance is that these companies specialize in rare, collector or antique cars. The agents, adjusters and other staff you'll interact with will be familiar with the ins and outs of a rare car. They'll also know the needs of a classic car owner better.
Further specialized coverages include:
- Increased replacement cost: Pays the difference between the agreed value and actual value if your car's value increases
- Roadside assistance: Includes towing with a flatbed truck only to prevent wear and tear during transport to a repair shop or back home
- Auto show medical reimbursement: In case someone sustains an injury at an exhibit or event featuring your car
- No attendance required: Provides coverage when your vehicle is being displayed, such as at a car show, even if you're not there
- Spare parts coverage: Covers damage or theft of spare parts, such as tires, valves or other gear, as part of a covered incident
- 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
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.
Drawbacks of a classic car insurance policy
Because classic car insurance is designed for rare or high-value cars, there are some shortcomings, compared with a policy from a mainstream company. You won't encounter these drawbacks at every classic car insurance company, though, so make sure you compare multiple quotes to find the best one for you.
- Mileage limits: Many classic car insurance companies only allow you to drive your car a certain distance each month.
- Fewer discounts: Many of the companies that offer insurance for classic cars are smaller, specialty companies that may not offer discounts for bundling policies, having a certain job or using telematics devices.
- Fewer driving-related coverage options: Classic car insurance companies might not offer some coverage options available at a larger company, such as roadside assistance or extended medical payments coverage.
Eligibility for classic car insurance
Classic car insurance isn't designed for cars used on a daily basis or ordinary vehicles like a recent Toyota or Volkswagen. Classic car insurance companies usually require something special about the vehicle, such as an old age, a high value or some customization.
In general, your car must fall into at least one of the following categories:
- At least 25 years old
- Modern muscle car
- Exotic
- Modified vehicle
It's also likely that your vehicle will need to meet all of the following requirements:
- In good condition
- Parked in a secure and fully enclosed garage, carport, storage facility or other approved structure
- Not used for daily commuting
- Not used for racing
- Driven no more than 7,500 miles per year (varies by company)
Driver eligibility
There are also usually qualifications for the owner. These vary by company, but typically you must:
- Be at least 25 years old
- Have a good driving record and at least five to 10 years of driving experience
- Have no more than one at-fault accident or moving violation in the previous three years
- Own and use another car as your primary automobile for getting to and from work, school and other frequent destinations
- Agree not to race your classic car or drive it on a racetrack
Collectible car types
Classic car insurance is also available for antique, exotic, custom and historic cars. The benefits and drawbacks tend to be similar, but the types of vehicle eligible may vary by provider.
While most policies are relatively similar, the way carriers classify collectible vehicles, including some types they exclude coverage for, is important to understand. Although definitions, years and descriptions can vary from company to company and state to state, the most common collectible auto categories are below. "Classic" and "collector" car insurance are used interchangeably for simplicity.
- Classic car: Defined by many insurance companies 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. Some companies require a car to be older than 10 years only to be "classic." The Classic Car Club of America regards vehicles manufactured between 1915 and 1948 as classic.
- Antique car: Defined by many companies as 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 regards a car as antique if it is at least 25 years old.
- Modified car: Defined by many companies as having an engine, body, chassis or interior significantly altered from its original condition, which can negatively or positively affect the value. Many companies will not provide collectible insurance for these types of vehicles (for example, an antique car that's had much of the stock equipment replaced or runs on nitro fuel).
- Kit cars and replicas: Defined as representation automobiles at least 24 years old with separate manufactured components or that represent the assembled reproductions of any motor vehicle at least 25 years old
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Other subcategories include:
- Street rods/hot rods made before 1949 that have been modified
- Vintage automobiles manufactured between 1919 and 1930 that may have been modified
- Veteran vehicles made before 1919
- Rare motorsport vehicles, vintage military vehicles, classic motorcycles, antique tractors and modern limited production models
Insurance companies for classic cars
Many well-known insurance companies — State Farm, Progressive, Farmers, Safeco, Geico, Esurance — as well as specialty carriers (many of which underwrite for the aforementioned companies) — Hagerty, J.C. Taylor Insurance, Condon Skelly, Grundy Insurance, American National — offer coverage for collectible vehicles. A good place to start is with your existing auto insurance carrier, which may be able to kick in a discount for insuring multiple vehicles.
See the full breakdown of the best classic car insurance companies.Classic car insurance companies
Company | Specialty or major insurance company? | |
|---|---|---|
| Esurance | Major |
| Farmers | Major |
| Geico | Major |
| Progressive | Major |
| Safeco | Major |
Cost of collector insurance and available discounts
Coverage for collectible vehicles is almost always less expensive than conventional automobile insurance, because you drive much fewer miles every year and are likely to keep the vehicle sheltered and in good condition. Nevertheless, the cost of classic or collector insurance is calculated similarly to common auto insurance.
"Collector car insurance is generally very affordable, possibly costing around one-third of what you might pay for regular auto insurance," said Kristofer Kirchen, president of Tampa, FL-based Advanced Insurance Managers LLC.
Car insurance discounts available on standard policies also apply to collectible car insurance and vary by company. Some circumstances that may qualify you for a discount include:
- Having multiple policies with the same carrier
- Insuring more than one classic vehicle
- Having a clean driving record with no accidents or claims in the past few years
- Equipping your vehicle with an anti-theft device
- Completing a defensive driver class
- Selecting a comprehensive-only policy, which is ideal for owners who plan on restoring but not driving an automobile
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