Classic Car Insurance: Things to Know

Classic cars require a very different auto insurance. Most policies require that your classic car be used on a very limited basis, such as for exhibitions, car shows, or car club activities, as opposed to a daily driving vehicle. Some packages, however, do allow you to drive five or six thousand miles yearly, whereas other policies don’t allow you to use the car for daily driving whatsoever.

The second thing to consider is what is meant by ‘actual’ versus ‘agreed’ value. The valuation of your classic car is at the heart of your policy and thus you have to establish if the insurance company will pay the actual value, or just the market value, in the event of a major accident or write-off. This is important because the market value may not reflect the true value of your car.

Another thing to consider in the appraisal process is vehicle depreciation or appreciation. Insurance companies know the depreciation concept quite well, but may not be familiar with classic cars appreciating in value as time goes by. Make sure this is reflected in your policy or you may not get the fair payout you deserve if something happens to the car. Equally as important is to arrive at a replacement parts policy. Since many classic car owners are painstakingly adamant about having authentic parts on their cars, you have to establish that should the need arise, the cost of replacing damaged parts is reflective of the actual value.