Collector car insurance has existed for over fifty years, but less than half of the vehicles that qualify for such coverage are not covered by specialty programs. Instead, most owners of collector cars, street rods, antiques, and exotics pay more money than they need to in exchange for standard insurance policies that are often more restrictive and less comprehensive.
If you own a collectible or exotic car, ask yourself the following questions:
- If my car is totaled, will I receive its full value?
- If I file I claim, will I get personal service?
- Do I mind paying for more than one type of liability?
- Do I mind paying a premium than is significantly higher than that of other companies?
If you expect excellent service, full coverage, and answered "yes" to the last two questions, collector car insurance may be for you.
Of course, you're probably also concerned about rumors you might have heard, that insurance for collectible autos comes with a lot of rules and regulations, or isn't meant for cars that are actually driven. Here are five things to help assure you that collector car insurance is a viable option.
1. Coverage: There are three basic types of automobile insurance coverage: Actual Cash Value, Stated Value and Agreed Value. Actual Cash Value (ACV) is what most standard street cars have. It pays out the "book" value of your car minus any depreciation in the event of a claim, which means the older your car is, the less value it has. Some mainstream insurers also offer Stated Value policies, which allow owners to "state" a value for their car or motorcycle that is greater than the depreciated "book" value. While this sounds good on the surface, and it is a better option than ACV, Stated Value policies still include some depreciation, and are also written so that the insurer only has to pay out an amount "up to" the value of coverage, not "equal to." Only Agreed Value policies guarantee a full payout in the event of a claim. With these policies, you and the insurer will agree on a value of your which recognizes the fact that collectible cars become more valuable as they age, and also takes into account any aftermarket modifications or restorations that have been made. Most reputable collectible car insurance companies offer only Agreed Value policies.
2. Valuation: While every insurance company handles valuation a little differently, most follow the same guidelines. Appraisals may or may not be required, but the following factors are considered:
- Originality: If the car is a stock original, valuation is much easier as there are statistics tables and book values that can be used to establish a fincial value. Modified and restored cars are more difficult to compare.
- Aftermarket Parts: The depth and details of a repair or restoration, or a modification, are considered. In all cases, you will get the best value for your car by providing detailed descriptions of any new parts – replacements or add-ons – that have been installed, preferably with pictures and receipts.
3. Vehicle Age: Some insurers require collectible cars to be at least 25 years old, but many are increasingly accepting brand new exotics, street-rods, and other collectible vehicles. Almost all collectible auto insurance is offered on a case-by-case basis.
4. Mileage Restrictions: Most owners of collectible cars, whether they're exotic performance cars or antiques, want to be able to show off their rides, but it is generally understood that such cars, even the exotic sports cars, are not driven to and from work every day. Some companies do impose annual mileage restrictions of 2,500 miles, but most have different scales of usage, and some offer unlimited mileage.
5. Other restrictions: Because collector car insurance is meant for the discerning, experienced, vehicle owner, there are common restrictions that exist. One is that drivers must usually have at least ten years of driving experience, another is that they must have clean driving records for two – and in some cases four – years, and a third is that the car must be stored in a locked facility when not in use. The vast majority of such restrictions are common-sense standards, and not at all detrimental to the enjoyment of your vehicle.
But What About the Money?
One of the major collector car insurance, Hagerty, claims that their policies are 500% less expensive than standard insurers, but this is based on antique vehicles. Still, the average premium on a collector car policy, even when covering a sports car, is significantly less than the same coverage (assuming it's available) would be from an everyday insurer. This is largely because insurance premiums are based on risk, and since most collector car insurance clients are experienced drivers who take good care of their cars, and live in upscale neighborhoods with extensive security, there is a lot less risk.
The bottom line? If you have a vintage motorcycle, a performance sports car, or even a real classic, collector car insurance will save you money, and give you the coverage amount you really deserve.
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