What Is Classic Car Insurance?

With conventional automobile insurance, your car is typically covered only up to its actual cash value, which is equivalent to its replacement cost minus depreciation. For example, if you purchased a brand-new Dodge Challenger in 2010 for $22,000 but got in an accident that totaled the car today, your insurance company may only reimburse you an actual cash value of approximately $14,000.

By contrast, classic auto insurance usually covers your collectible vehicle for an agreed (often called “guaranteed”) value that is mutually agreeable to you and the insurance company – an amount the automobile is worth based on respected collectible car valuation guides like the Old Cars Report Price Guide, an appraisal by a professional, research conducted by the underwriter, or some form of documentation. For instance, if you own a 1957 Chevrolet Bel Air with an 8-cylinder engine and 162 horsepower, a leading insurer of collectible cars, would value that at about $61,000. If you have a collectible car insurance policy in place and that vehicle suffers a total loss, the insurer will compensate you the full $61,000.

By their very nature, collectible cars generally increase in value, especially if they are well cared for and/or restored. Everyday automobiles that we drive to work, schools, stores and our favorite destinations, on the other hand, usually lose value over time and don’t require agreed value-type coverage.

Types of Collector Auto Insurance

While most collectible automobile insurance policies are relatively similar, the way carriers classify different types of collectible vehicles, including some types they exclude coverage for, is important to understand. Although definitions, years and descriptions can vary from insurer to insurer and state to state, the most common collectible auto categories are below. We generally will use classic and collector car insurance interchangeably for the purposes of simplicity.

·         Classic Car Insurance: defined by many companies as being 19 to 24 years old, restored, in good working condition, and greater than the average value of other autos of the same make and model year; some insurers consider a car of this description that is only greater than 10 years old to be “classic.” The Classic Car Club of America regards classic vehicles to be those manufactured between 1925 and 1948.

·         Antique Car Insurance: defined by many companies as being at least 25 years old and in good working original or original restored condition. In some states, an “antique” car only needs to be at least 20 years old, while the Antique Automobile Club of America regards a car that is at least 45 years old to be antique.

·         Modified Car Insurance: defined by many companies as being significantly altered in its engine, body, chassis or interior from its original condition, which can negatively or positively change the value; many insurers will not provide collectible coverage for these types of vehicles (for example, an antique car in which much of the stock equipment has been replaced or that runs on nitro fuel).

·         Kit cars and replicas: defined as representation automobiles that are at least 24 years old with separate manufactured components, or that represent the assembled reproductions of any motor vehicle at least 25 years old.

·         Other subcategories within these four main categories include:

o    Street rods/hot rods made before 1949 and that have been modified

o    Vintage automobiles manufactured between 1919 and 1930 that may or may not have been modified

o    Veteran vehicles made before 1919

o    Rare motorsport vehicles, vintage military vehicles, classic motorcycles, antique tractors and modern limited production models.

Automobiles on the periphery that commonly do not qualify for collectible car insurance include “exotics” – cars that are under 15 years old but that have the potential to increase in value; and “old” cars, which are considered simply long in the tooth and not classic, antique, vintage or veteran.