How Does Classic Car Insurance Work?
Classic car insurance is the perfect fit for antique & vintage autos
Classic car insurance is a special type of coverage for a wide variety of cars including classic, antique, and customer cars, as well as a variety of other specialty vehicles. The features and premiums you’ll pay vary from insurer to insurer, so it’s important to understand what you need to know to buy the right policy for your vehicle.
What Is Classic Car Insurance?
The term “classic car” can lead to a bit of confusion because automobile authorities apply different definitions. The Insurance Information Institute defines antique and classic cars as vehicles at least 25 years old.
But when shopping for classic car insurance—sometimes called “collector car insurance”—an insurer’s definition is the only one that really matters. Many providers define a classic car as at least 20 to 25 years old, generally speaking. And, an insurer may offer classic car insurance for a wide range of vehicles, including:
- Antique cars
- Classic cars
- Custom cars
- Exotic cars such as Alfa Romero or Lotus
- Fire engines
- Kit cars
- Military vehicles
- Race cars
- Street rods
Types of Policies Available for Classic Cars
Collector car owners need auto insurance that will provide added protections for their unique vehicles.
A classic car insurance policy will include standard coverages you’d seen in a traditional policy:
- Bodily injury liability
- Property damage liability
When buying a traditional policy, you may decide to forgo coverages not required by law such as collision and comprehensive if you own your automobile outright. But classic-car owners need collision and comprehensive coverages to protect their valuable investments.
When requesting quotes for classic car insurance, some providers include these coverages in their standard policies. For instance, a quote we received from Hagerty included all state-required coverages, including bodily injury and property damage liability, and collision and comprehensive coverages, and charged no deductible.
A good standard classic car insurance policy will include coverages that you won’t find in a traditional auto policy, including agreed value coverage. Typically, the collision coverage of a traditional standard car insurance policy pays actual cash value—its “depreciated value”—if you total your vehicle.
Agreed Value Coverage
A comprehensive classic car insurance policy will include agreed value coverage, which covers the car’s actual value. Since the value of a classic car tends to increase over time, agreed value coverage is key in the event of a total loss. This is one of the most important coverages a classic car insurance policy should include because classic automobiles don’t comply with standard valuation metrics.
Spare Parts Coverage
A standard classic car policy may also include spare parts coverage. Parts for most modern cars are usually readily available. But classic car owners often have trouble finding parts when they need them, so they often buy spare parts when they stumble upon them. For instance, the owner of a 1965 Ford Mustang may buy a couple of extra original hubcaps or even a few engine parts for future repairs. A comprehensive classic car policy may also include trip interruption and roadside assistance coverages, to help pay the cost of breakdowns that occur when auto owners are traveling to events such as car shows.
Classic Car Policy Fine Print
Providers only extend classic car insurance policies to certain ages and classifications of automobiles. But they also impose restrictions on car owners that traditional auto policies don’t.
Typically, the terms of a classic car policy prohibit everyday use for commuting to work or running errands. Some insurance companies, including Grundy, won’t insure a classic car unless you also own a modern auto for daily use. Some carriers advertise classic car insurance policies that permit “flexible usage,” which allows for occasional pleasure rides. However, this type of insurance is designed for cars primarily driven to events such as car shows and auto club events.
A classic car insurance policy may also stipulate that you store your automobile in an enclosed, locked facility like a garage or storage unit.
According to the Insurance Information Institute, some insurers won’t write classic car insurance policies for owners who have serious traffic violations on their driving record, like driving under the influence or reckless driving.
Since classic car insurance policies include restrictions that traditional policies don’t, it’s important to understand the terms before buying coverage. When requesting quotes, speak with an agent, ask pertinent questions, and request a sample policy to review before signing on the dotted line.
How to Choose the Best Policy for Your Classic Car
Know Your Automobile’s Value
Since many classic car insurance policies include agreed value coverage, you must know your automobile’s value before buying coverage. If you’re unsure where to start in determining your car’s value, subscribe to theNADA Guide, published by J.D. Power. It’s a comprehensive source for appraising classic and collectible automobiles.
Look for Insurers With a Good Customer Service Track Record
If you choose a major carrier for classic car insurance coverage, review the latest J.D. Power U.S. Auto Insurance Satisfaction Study to see how your preferred insurer fared. J.D. Power’s studies rank insurers based on customer feedback. The company’s 2020 study listed the following winners:
- California: Wawanesa
- Central: Auto-Owners Insurance
- Florida: Allstate
- Mid-Atlantic: State Farm
- New England: Amica Mutual
- New York: State Farm
- North Central: GEICO
- Northwest: GEICO
- Southeast: Farm Bureau Insurance—Tennessee
- Southwest: American Family and GEICO (tied)
- Texas: Texas Farm Bureau
Also, search the Better Business Bureau website to review a provider’s customer complaints and BBB rating.
Search for Comprehensive Standard Policies
Standard classic car insurance policies aren’t created equally. For instance, American Collectors Insurance includes restoration protection, spare parts coverage, and roadside assistance in all its classic car policies. Meanwhile, Farmers Insurance only offers roadside assistance and spare parts coverage as options to its classic car policies.
Consider the Provider’s Financial Stability
Before purchasing a classic car policy, check the company’s AM Best financial rating. A carrier’s financial rating is a good indicator of its ability to meet its financial obligations.
Inquire About Discounts
Discounts can often help you save loads of money on auto insurance. If you’re insuring more than one vehicle, ask the agent if the provider offers multi-car discounts. And if you buy classic car insurance from a major carrier, inquire about bundling your policy with home insurance. Many insurers also offer good driver discounts, and a few extend discounts to homeowners and seniors.
American Modern Insurance Group provides discounts of up to 20% if your car has certain anti-theft features.
Examples of Classic Car Insurance Policies
Classic car insurance is often cheaper than traditional auto insurance coverage. According to American Collectors Insurance, its rates are up to 40% lower than a traditional car insurance policy.
While many insurers offer standard classic car insurance policies that include all state-required coverages and collision and comprehensive coverages, the extra coverages they offer varies. We requested quotes from three insurers to see how their coverages and rates compare, using the following car and driver profile:
- Driver: Female, 45 years old
- Location: Minneapolis, Minnesota
- Vehicle: 1965 Mustang GT convertible
- Agreed value: $45,000
Each row in the chart shows coverage type, the maximum amount of coverage for that type and the cost for that coverage in parenthesis. The annual premium is the total of all coverages plus any additional miscellaneous benefits the insurer included in its quote:
|Coverage||American Collectors Insurance||Grundy Insurance||Hagerty|
|Bodily Injury/Personal Property Liability||$100,000 (Cost: $19.00/yr.)||$100,000 (Cost: $26.00/yr.)||$100,000 (Cost: $31.00/yr.)|
|Personal Injury Protection||$40,000 (Cost: $4.20/yr.)||$40,000 (Cost: $3.00/yr.)||$40,000 (Cost: $18.00/yr.)|
|Uninsured/Underinsured Motorist||$100,000 (Cost: $22.00/yr.)||$50,000 (Cost: $1.00/yr.)||$100,000 (Cost: $22.00/yr.)|
|Collision||$0 deductible (Cost: $112.50/yr.)||$0 deductible
$0 deductible (Cost: $157.50/yr.)
$0 deductible (Cost: $158.00/yr.)
$0 deductible (Cost: $184.00/yr.)
|Towing and Labor||N/A (Cost: $34.95/yr.)||$250 (Cost: $0/yr.)||N/A (Cost: $45/yr.)|
|Spare Parts||$500 (Cost: $0/yr.)||$500 (Cost: $0/yr.)||$750 (Cost: $0/yr.)|
|Total Annual Premium||$351.15||$323.00||$432.00|
- Classic car insurance usually includes state-required coverages, plus collision and comprehensive coverages.
- Typically, standard classic car insurance policies include extra coverages, like roadside assistance, spare parts coverage, and trip interruption coverage.
- Many classic car insurance policies pay an agreed upon value for a total loss.
- Usually, classic car insurance policies limit the way you can use your vehicle and have strict storage requirements.
- Classic car insurance coverage often costs less than a traditional auto insurance policy.