Collector Car Insurance
Collector cars are a hobby and status symbol for many people. In many cases, they are antique cars that have been rebuilt but they may also be newer vehicles that are rare or heavily customized. Whatever the case, most collector cars are more valuable than their market value, and they must carry special insurance in order to accommodate this. If you own a collector car, it’s a good idea to do some research to determine how much insurance to buy and where a policy can be obtained.
What exactly is a Collector Car?
In order to be classified as an antique or classic car, a vehicle must be at least 20 years old. Collectors carefully restore the vehicle to perfect condition by completing body rennovations, repainting the vehicle, installing new interior and correcting any mechanical defaults. These vehicles may then be entered in car shows or simply driven for pleasure.
The older the vehicle, the more it will generally be worth once it has been restored. Many popular vehicles for restoration are from the 1950s and 1960s; vehicles from later years are most commonly only restored if they are rare or have a unique or interesting body shape.
Some collector cars are not antiques. Instead, they are newer-model vehicles that are rare or otherwise desirable. These vehicles are often heavily customized with custom paint, aftermarket parts or other modifications.
Why do collector cars need unique insurance?
Liability auto insurance is a necessity for any vehicle that will be registered or driven on public roads. If a vehicle is in storage or isn’t driven, it’s not necessary to carry liability insurance but it may still be a good idea to carry coverage that will protect the vehicle itself against damage.
Whenever an auto insurance policy is taken out against a vehicle, the vehicle is insured at its market value. This means that if the vehicle sustains damage, the insurance company will pay up to the value of the vehicle; anything over this amount will cause the vehicle to be considered a total loss. Market value is determined by the average cost of all vehicles of that year, make and model available on the market at a given time. If most of those vehicles are in poor shape, the market value will go down substantially. On the other hand, a well-maintained and renovated classic car can sell for many thousands of dollars.
Because the market value of a car will be substantially lower than the value of a vehicle that’s been painstakingly restored, a special insurance policy is necessary. This ensures that the customer is able to get the vehicle’s true value protected. Special collector’s policies also take into account the unique usage of a vehicle and adjust coverage and price accordingly.
What’s the difference between a Collector Car Insurance Policy and Regular Car Insurance?
The first and most obvious difference between a regular insurance policy and one designed for collector cars is the way a vehicle’s value is determined. Regular insurance bases a car’s value on the market price of the vehicle, excluding most aftermarket improvements. Collector car insurance relies in the appraised value of a vehicle and is called a stated-value policy.
Collector car insurance may also carry lower limits of liability than a regular policy, and usually includes at least comprehensive coverage if not collision. Comprehensive coverage pays for damage caused by weather, vandalism, theft and other similar perils and is a valuable coverage for any vehicle that spends a lot of time in storage.
Car insurance for antique cars is often cheaper than for regular vehicles. Collectors usually don’t drive their vehicles for daily use, so the likelihood of the car being involved in an accident is very low. Due to the low annual mileage, insurance prices are lower than premiums for vehicles that are used for daily transportation.
How do I buy Collector Car Insurance?
Many companies specialize in insuring rare or collectible vehicles. Some companies that handle these types of autos also provide other types of unorthodox insurance policies, like high-risk insurance. While many major companies are able to provide a stated-value policy, a company that specializes in collector’s cars will often have more affordable premiums.
The first step to obtaining this type of policy is to have the vehicle appraised. The appraiser will determine the value of the vehicle by taking into account any renovations that have been completed and the car’s overall condition. Once the actual value of the vehicle has been determined, the vehicle’s owner can search for a company that will provide coverage. He might contact the insurance company who provides coverage for his other vehicles to see if a stated-value policy is available, or he might search for a company that specializes in this type of insurance.
Word of mouth plays an important role in finding these insurance companies, and if an owner is a member of a club or show circuit he will probably ask for recommendations from others. Collector car insurance companies can also be found online, and it’s easy to obtain several free quotes to compare between them this way.
Once a policy has been purchased, the insurance company will require the appraisal documents. The company may also ask for yearly odometer readings to prove that the vehicle is maintaining low mileage. If a collector’s car is driven extensively, it may not qualify for classic car insurance, and the policy may be canceled or changed.
Always be sure to discuss the policy with the insurance company to confirm that it will cover everything you need it to. By taking the time to understand exactly how your insurance works, you can guarantee that you’re protected and that there will be no unpleasant surprises if the vehicle sustains damage.