Specialty car insurance has been around for quite a while now, but studies have shown that less than half of the collector vehicles on the road today are insured by these kind of programs. There’s no need for this. Regular car insurance companies will charge you an arm and a leg to insure your classic car, and the standard products they provide really won’t serve your needs. Know a few things going in to the process of buying insurance, and you’ll get protection for your prized car and a few less sleepless nights.
This process of buying classic car insurance can be confusing for the first time buyer, mainly because how you’re going to use your classic car will determine your coverage. If this is your first classic car, you need to see what a particular company has to offer. Will you be able to use your own mechanic for repairs? Can they insure your car for what you feel the car is actually worth? Will you have liability insurance when participating at car events? Will they cover damage incurred at car shows? How about coverage during restoration? Will there be flexible premiums based on miles driven per year? How about coverage for shipment to out of state or overseas events?
If you get a “yes” answer to about half of those questions, then you’ve found a good insurance carrier. Insurance is all about risk, and expect the insurance company to impose a few rules to mitigate their risks. The following are some of the more common qualifiers you can expect when buying specialty car insurance:
· You must own and use another vehicle for daily driving
· The car has to be a certain age or older
· You may need to be a certain age or older
· The car may only be driven 2,500 miles per year – or even less
· The car may only be driven for certain activities
· The car can’t be driven for commercial use
The terminology associated with collector cars can be confusing, so don’t assume anything. Ask for definitions for every term, or better yet a glossary of everything that’s covered in your policy. Have hypothetical questions ready to ask regarding the handling of claims for specific issues. Finding out how a potential insurer handles a total loss is a great place to start. Be ready to go to several companies and compare answers until you find one you’re satisfied with.
You may run into insurers that offer a different amount of coverage for total loss, depending on whether they offer Actual Cash Value (ACV), Stated Value, or Agreed Value. ACV coverage is coverage for everyday cars and pays out a depreciated ‘book’ value, which certainly isn’t what you want for a classic car. Collectible cars can be covered under Stated Value, a much better option than ACV. But stated values can still depreciate, so it’s important to see what terms are offered. The best deal for you as the owner is an Agreed Value insurance policy. Then you’ll get all of your money back in the event of a total loss.
Service, rates and types of coverage and claims handling will vary from specialty company to company, as with standard car insurers. Car clubs are a great place to talk with fellow classic car owners about their experiences with various insurance companies.
Whichever company you choose, make sure that you have one that answers your questions and is willing to work with you. After all, even with specialty insurance, you’re still buying a service, and deserve to be treated as a valued customer.
