Classic-car owners can save on insurance by choosing a carrier that specializes in collectible vehicles.
Classic-car insurance is less expensive and can offer the best coverage for your type of car, says classic-car specialist Matt Robertson, managing partner of Leland-West Insurance Brokers Inc. in Fresno, Calif.
By tailoring their policies to collectors -- who usually take better care of their cars than most drivers -- classic-car insurers may be able to sell you a policy for less than a conventional carrier.
You typically have to agree to limit the number of miles you drive each year, says Carole Walker, executive director of the Rocky Mountain Insurance Information Association. In some cases, you may be limited to 2,500 miles per year, she says.
See also: A guide to car insurance basics
The amount you'll pay for classic-car insurance varies, depending on the carrier and the model you own. However, it's common for classic-car owners to see their insurance costs drop by 50 percent when they trade a standard policy for classic-car coverage, says Robertson.
Often, a classic-car policy includes a deductible, or the amount of money that must be paid out of pocket before the carrier will pay an insurance claim.
There's no average amount for deductibles, Robertson says. That's because deductibles depend on the value of vehicles, and values vary widely. Generally, the types of coverage you would buy for a classic car are the same as for standard vehicles: liability, collision and comprehensive.
Determine if your car is a classic
For insurance purposes, classic cars generally are defined as collectible vehicles age 15 years or older and in good condition, Robertson says.
Collectability depends on the degree to which individual models are sought after and the value placed on them by collectors. That means each car must be judged on a case-by-case basis. Age alone doesn't make a car collectible.
When an older car stops depreciating and begins to rise in market value, it generally becomes a collectible model, says Jonathan Klinger, a spokesman for Hagerty, a classic-car insurance company in Traverse City, Mich. Classic cars are "objects of desire" rather than vehicles used primarily for transportation, he adds.
Often, classic cars have a sentimental value to their owners that exceeds their market worth. Perhaps the classic car belonged to a parent or a grandparent and has become a family keepsake.
"There is an emotional connection," Robertson says.
A key difference between classic-car coverage and a standard policy is how the insurer accounts for value. Classic cars can appreciate in value over time, while most standard cars depreciate.
Standard auto policies typically provide actual-cash-value coverage. Under these plans, the automobile's value can drop based on its age. This could reduce your claim if you suffer a total loss.
Ask for guaranteed coverage
If you have an actual-cash-value policy, you can be paid no more than what the car typically would sell for if your vehicle were totaled. Guaranteed or agreed-value coverage is a better choice for classic-car owners. Under this protection, the owner and the insurance company agree upon the car's value when the policy is issued, and it can't be depreciated. You know exactly what your car is worth in terms of insurance coverage.
Classic-car companies know that their owners are less likely than most drivers to drive recklessly or to leave their cars parked in high-crime areas, says Roberson. If you save the car for special occasions, you're much less likely to get into an accident that results in an insurance claim.
Here are some tips for getting the best classic-car policy.
- Check the insured value. Be sure your car is accurately valued in your policy. To do this, you can consult an auto price guide such as NADAguides.com and Hagerty.com. You also may wish to speak to a professional appraiser. Appraisers often have insights into what make classic cars more desirable, such as being part of a limited edition.
- Arrange for safe towing. If you buy a policy that includes roadside assistance, make sure it provides for flatbed towing. Using a flatbed -- which gets all four wheels of your car off the highway -- will guarantee your classic car arrives at the repair shop without unnecessary body damage.
Keep up your payments
Never let your auto insurance lapse for a classic car, even if you seldom drive it. Your homeowners policy may not cover a classic car when it's parked in a garage, Robertson says. A robbery or damage from a fire could leave you without compensation.