Guide to Understanding Classic Car Insurance

If you’re a car enthusiast, just the idea of owning a classic car might be enough to get your heart racing. For many, classic cars are more than just vehicles: they are cherished heirlooms, passion projects, and investments. This is why you must take a different approach to their care with classic car insurance, which is a special type of coverage that reflects your vehicle’s value and uniqueness.

Classic car insurance differs from your usual auto insurance coverage, and this is why you should take the time to understand your policy and ensure it includes all the fine points you need. Luckily for you, the sages at MoneyWizard.ca are at your care with all the information you need about classic car insurance. Let’s get you in the loop.

What Is Classic Car Insurance?

Simply put, classic car insurance is a special type of insurance policy that helps protect classic or antique cars. Standard auto insurance may provide some coverage for your classic car, but it may not cover your vehicle’s full value. This is because standard auto policies factor in age, mileage, and depreciation when assessing how much your car is worth.

If your classic car has been restored or customized, for instance, it may be worth well more than its depreciated book value. As a result, a regular auto insurance policy won’t suffice to cover the cost of repairs after an accident.

This brings many enthusiasts to wonder: what defines a classic car? We’ll answer that for you below.

What Makes A Car A Classic?

According to the Insurance Information Institute, there’s no standard definition of a classic or antique car. For instance, if a car’s value is higher than its original selling price, insurance carriers might consider it a collectible and qualify it for specialized classic car insurance. Generally, vehicles that qualify for classic car auto insurance include the following:

• Classic and antique cars that are typically at least 25 years old
• Modified vehicles and hot rods
• Muscle cars
• Classic trucks
• Exotic and luxury autos

You may also consider buying specialized insurance for antique tractors, classic motorcycles, and vintage military vehicles.

Does Your Car Qualify For Classic Car Insurance?

While your car may fall into one of the above categories, its age may not be entirely enough to qualify you for specialized classic car insurance. Although requirements differ among providers, most cars (and their owners) must meet the following criteria to qualify:

• Clean driving record. Your insurance provider may disqualify you from classic car insurance if you have serious violations on your driving record, like driving under the influence, reckless driving, or repeated speed violations.
• Limited use. You shouldn’t use your antique car for everyday errands or commuting. Your insurance provider may place mileage limitations and ascertain that the car is properly garaged if you travel with it. Insurance companies may also require you to own a primary car for daily commutes.
• Secure storage. Insurers may require that you always store your special vehicle in a locked, enclosed private structure when it’s not in use. Storage facilities may include a specialized storage unit or a residential garage.
• Car meetings and shows. Some insurance carriers will let you use your car to travel to auto club meet-ups and car shows, but others will restrict this provision. In this case, your insurer will provide specialized coverage for car shows and meetings. Also, you should check whether your insurance company places any restrictions on multi-day, high-mileage drives.

However special your vehicle is, it may not automatically qualify for classic car auto insurance. Check with your insurance provider to ensure your car satisfies their requirements.

What Does Classic Car Insurance Cover?

Your classic car insurance policy includes the provisions found in a standard car insurance policy, which include the following:

• Collision insurance covers the costs of repairing or replacing your car if it is damaged in an accident with an object or another vehicle.
• Comprehensive insurance pays the cost of repairing or replacing your vehicle if it is stolen or damaged in an incident that isn’t a collision. Also called “other than collision” coverage, comprehensive insurance typically pays for damage from vandalism, fire, or falling objects.
• Property damage liability insurance pays to repair the damage you cause to another person’s car or property. This coverage won’t pay for damage to your own vehicle.
• Bodily injury liability insurance settles the medical expenses of another person who is injured in an accident for which you’re found to be at fault. Coverage may also extend to their lost income if they are unable to continue working due to the injuries.

Unlike standard car insurance that pays out the car’s actual cash value at the time of loss (after factoring in depreciation), classic car auto insurance covers your vehicle for an amount agreed upon by the insurer and yourself, which is often referred to as the guaranteed replacement cost. Over time, the value of your classic car may appreciate, so you can always adjust your coverage limit to mirror its current value.

Your classic car auto policy should provide the flexibility to take your vintage car to a specialist, even if the rates are double or triple as much as the cost of repairing a normal car in a traditional body shop. Coverage for towing will also be commensurate with the special demands for transporting your classic car. Coverage for spare parts must also be in line with the cost of replacing valuable and hard-to-find vehicle parts.

How Much Does Classic Car Insurance Cost?

According to Progressive, classic car insurance rates are on average 36% less than standard car insurance rates. Insurance providers also consider classic cars to be lower risk since their owners tend to love them a little more. Generally, you will drive this type of car less often since it’s not your primary means of commuting.

Nonetheless, insurance carriers will price your classic car insurance policy differently depending on the type of classic car you have and a combination of other factors, which include the following:

• Your driving history
• Average miles driven per year
• Your policy coverage limits
• Deductible amounts

You can expect your insurance provider to place strict mileage limits on your policy, and the trade-off for lowering those limits is a lower premium. You can also expect to pay lower premiums if you store your classic car in a secure garage or climate-controlled showroom year-round.

What Are The Benefits Of Choosing Classic Car Insurance?

Classic auto insurance offers some key benefits over standard auto insurance.

Lower Premiums

Insurance providers consider classic cars a lower risk, since classic car owners tend to be more careful with their antiques, and they’re often driven less often. As a result, carriers adjust insurance premiums accordingly, which run about 36% lower on average than a standard car insurance policy.

Guaranteed Value Payout

Classic car insurance could also be referred to as guaranteed value coverage. What does this mean? You simply tell your insurer the value of your classic car, and after they affirm that it’s a fair figure, they guarantee that value is what you’ll receive as a payout in the event of a covered loss. Isn’t this a win?

In contrast, standard auto insurance policies work on an actual cash value basis. In this case, your claim will take into account the car’s depreciated value, and hence you are likely to receive a smaller payout.

Optional Coverage

Classic car insurance also allows for the inclusion of optional coverage that is specific to antique cars. For instance, you could include roadside assistance coverage, spare parts coverage, and event-specific coverage for travel or auto shows.

Frequently Asked Questions

Is there a mileage limit for classic cars?

Your classic car might be a treasured possession, but you can’t drive it whenever you want just for pleasure. Insurance carriers often place mileage restrictions with the expectation that you won’t use your classic for daily commutes. If your classic is a daily use car, you may need to obtain a different auto insurance policy. Figure out how you’ll use your classic car to ensure you remain within your insurer’s permissible mileage limits.

How do I know if my car is “classic”?

While there are many definitions of classics, a classic car should be at least 10 years old, and an antique car will be at least 25 years old. Your classic car may also be a modern one with modifications in imitation of an antique version. Your vintage tractor or military vehicle may also qualify for the classic car designation.

Are there restrictions on how I can use my car?

Some insurance providers may place restrictions on how you use your classic car. For instance, you may be required to store it in a locked garage and not park it on the driveway. Your insurer may also require that you drive it entirely as a hobby vehicle (including in auto club parades and activities) instead of a daily use car or take it to car shows. The insurance company may need proof that you own another vehicle for primary use.

Does my driving record impact my insurance premiums?

Insurance companies assess your driving record to determine how risky you are as a driver. You can expect to pay higher premiums if you have accidents or serious traffic infractions on your driving record. You may also pay higher premiums if you’re a new driver without a solid insurance track record.