Antique Car Insurance
Every driver needs car insurance, but very few drivers need as much coverage as an antique or classic car owner.
For the most part, antique car insurance and insurance for a daily driving automobile have a lot in common. Whether driving a classic car or a transportation-only beater of an automobile, a driver needs insurance to protect against collision, bodily injury, or property damage resulting from an accident. It is in that last category, property damage, that the two types of insurance diverge.
Antique Car Insurance
The biggest difference between an antique car and a modern car is how the value of the car is determined. A modern car earns its value for its reliability, comfort, features, and demand for the car among people who need a car for transportation purposes. Antique cars, however, earn their value from their rarity, condition, the originality of the car (how many parts are factory, not aftermarket), and most importantly, what other collectors or dealers would be willing to pay for an automobile.
Let's take into consideration two completely different cars. On one hand we have an all-American classic muscle car that has not been modified from its original condition. The owner was sure to take good care of the car, driving it sparingly and never replacing any piece of the car that would not have been found on the car when it left the factory. The other car is a modern economy vehicle, designed to provide a low-cost method of transportation.
We take both cars, and crash them. Both sustain the same damages, and both need repairs. However, the parts we would use to repair each vehicle are very much different. Parts for a classic car are horrendously expensive, as there are few replacement parts in existence. Secondly, classic car enthusiasts would much prefer to repair any damage to the automobile with factory used parts from another automobile of the same type. With antique car insurance, an auto collector can opt for “parts insurance” that guarantees the market price for replacement of original parts following damages.
The economy car owner, however, will likely add any repair parts that are easily located and are the least expensive as the car doesn't derive its value from the originality of the vehicle, nor its age or rarity.
Below are a few of the more important details of an antique car insurance policy.
Agreed Value Coverage
Total loss, an event in which a car is totaled or stolen, is one of the most important pieces of the antique car insurance puzzle. By using agreed value, car enthusiasts, collectors, or the average driver can protect their classic ride for its full value or purchase price.
Unlike other automotive policies where cars are given a value as determined by current market conditions, classic cars, which can be as difficult to price as they are expensive to buy, are assigned a value by the owner and insurance company. With a simple agreement knows as an “agreed value,” the insurance company promises to deliver a stated amount of cash should the owner experience a total loss.
This type of policy is commonplace for products that have a value that is difficult to determine, or if the particular item is difficult to replace. With antique cars, both of these variables are at play.
Antique Car Insurance Riders
Additional car insurance riders allow antique car owners to insure themselves against other risks that come naturally with the antique collectable hobby or business. These are not staples of a policy, and are usually added only at the request of the car owner. Though not necessary by any stretch, such coverage should be carefully considered.
One of the most common riders is one that affords protection against damages or liability resulting from an autoshow. Usually, this rider allows for reimbursement when certain named perils are triggered. These usually include lawsuits or injury of yourself or others.
Another popular rider is “new purchase” coverage designed to protect any recent car purchases up to a certain dollar amount. Generally, these new purchase plans afford a full month of coverage in amounts ranging from $10,000-$100,000. Such a rider is beneficial if you make frequent purchases of antique or classic cars and need coverage until you can buy permanent insurance for your new vehicle.
Finally, antique car insurance companies often offer “under construction vehicle insurance” riders that step up the policy coverage over time. If, for example, a collector were to rebuild a car over the course of a year with an expected value of $100,000 at the end of the build, the policy might start at $20,000 and rise by an additional $20,000 every quarter until the full $100,000 is covered. This rider often saves money in insurance, since the car owner never pays for more insurance than is necessary.