Do you have a classic automobile—or a new collector’s car—(or two or three or…) that you love to cruise in or trot out for car shows? Have it tacked onto your family’s standard car insurance policy through a company like GEICO or Progressive? Oops. That was your first mistake. Did you know that you can save hundreds of dollars a year, find coverage that is unique to your classic car and how you use it, and better protect your automobile in case of theft or damage. Classic car insurance is how and it’s nothing like your average minivan’s policy.
Why Amortization is a Classic Car’s Enemy
Take a Camaro, for example. Camaros are considered rare and have maintained their value over the year—but not on a typical amortization schedule. Thus, Camaro owners who insure their cars with your basic, run-of-the-mill insurance policy risk losing their Camaro—and a lot of money—should an accident happen. Discount insurance companies that you’ll see running clever ads on TV are able to offer deep discounts because of their high volume. Classic cars, on the other hand, don’t make mega-companies mega-bucks, so their policies are not tailored to classic car owners.
Plus, standard policies typically don’t shell out the big bucks for the right replacement parts, meaning that you’ll be paying for the repairs you want out of pocket or sacrificing quality and dramatically lowering the car’s value in the process. Today’s cars are built differently than the automobiles of yesteryear. A car that rolls off the assembly line today is designed for easy repairs. You can quickly remove the body panels without doing any metalwork while many cars that were made over 20 years ago require welding. But standard insurance companies don’t often provide for specialists or new old stock parts.
Classic Car Insurance = TLC for Your Car
What’s a classic car enthusiast to do? Turn to classic car insurance. Because classic car insurers are smaller and geared to collectors cars, customized cars, and other one-of-a-kind vehicles, they are able to personalize their services to you. (Let’s put it this way—you won’t find any minivans on their docket.) With classic car insurance, you can design a policy and a level of coverage that is right for you. Forget one-size-fits-all. Your classic car certainly isn’t. Why should your insurance be?
When looking for a classic car insurance provider, consider how you use your car. Some companies limit how many miles you can drive annually. Others will only compensate you for the market value of the car, which is risky should the car’s value fluxuate throughout the year. Once you have settled on an insurance company, be prepared with information about the car, as well as its current policy, and your driver’s license and social security number. You’ll also want to have detailed photographs of the car. Most classic car insurance providers require photos—and lots of them. (And, should you try to sneak something by them, they’ll most likely ask you for more shots so they can take a closer look.) Don’t forget documentation of any changes, upgrades, or modifications you have made to the car. If you have switched out the engine or tweaked it in any other way, you also may be required to sign a rider. And an appraisal of the car couldn’t hurt, either, though it is not always mandatory.
Agreed vs. Stated Value
Some classic car insurance providers offer what is called “Agreed Value” insurance. This means that the owner and the company negotiate a price at the beginning of the car’s policy and the car is insured for that amount. Other companies offer “Stated Value” policies, which is the normal sale value of the vehicle. But, most experts agree, “Agreed Valued” is the crème de la crème of policies. Of course, the greater the amount you insure, the higher your premium. But classic car policies are often hundreds of dollars less expensive a year than a standard policy. That’s because classic car insurance companies have a few extra rules to ensure that owners are treating their cars with extra care. Both State Farm and Allstate offer “Stated Value” or “Agreed Value” policies, so if you are currently with them, you may be able to update your policy without ditching your company completely.
A daily driver requirement is an industry standard. This means that, in order to obtain classic car insurance, most providers will mandate that you have another car—typically less than 20 years old—that is your daily driver. This car must also be covered by insurance—the standard kind, of course. In addition to a daily driver, your classic car must be garaged or kept covered in your home. And some providers have an annual mileage limit of 2,500 miles a year, though there are plenty of companies who have thrown away this limit, for those cruisers who couldn’t possible live without their classic year ’round.
Ready to Save?
A few providers put salvage retention in their policies, meaning that in the event of a wreck, you may be able to salvage some parts—which can cut down your out of pocket costs. And, if you bolster security with a device like a steering lock or a tracking device, most companies are willing to lower your rate even more. “GreaseGirl” of MyRideIsMe.com boasts that she saved $793/year by switching to classic car insurance. (Take that, Geico!) If you love to lavish your classic car with tender love and care, why not get an insurance policy that will treat it with TLC, too? Classic car insurance policies like those offered by Hagerty and American Collectors are the only ones around that will give your car the special treatment it deserves. (It’s the next best thing to a red carpet.)
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