Classic cars are beloved by the car community, with around 43 million cars in the United States fitting the definition of “collector” or classic vehicle. The combined value of those collector cars is estimated to exceed $1 trillion in insurable value.
What exactly is a classic or collector car? How does one define classic for both registration and insurance purposes? Let’s get into it.
What old does a car have to be to be considered a classic?
There are several ways to truly define a classic car, and those can differ immensely. America’s Classic Car Club defines classic as a vehicle that is distinctive or fine and generally built between the years of 1915 and 1948. That being said, to register a classic car you would need to adhere to state law. With most states, cars of that age are considered vintage or antique automobiles. Make sure to check with your own state’s specific automobile guidelines.
From an insurance perspective, the age of a classic car must be at least 20 years old but not more than 40. In order to have it insured and registered as a classic, your vehicle must not be modified and kept to its original design/specifications. Any restoration done must be consistent with the way the car was built originally, meaning that it needs to include the kinds of materials used in the interior and all the kinds of parts used in the engine. No “modern” applications, so no built-in nav system or audio player.
Is it expensive to insure a classic car?
You may be surprised to learn this, but classic car insurance is traditionally less expensive than typical automobiles. This is because classic cars have restrictions on how long/far they can be driven and how often, and some insurers or states only allow classic cars to be driven and used at events like car club meetings, parades, or car shows. They cannot be used for daily transportation.
If a car spends more time in the garage than out and about, there’s less risk of it getting into an accident or experiencing other damage. Rates will be lower, but this doesn’t mean that these cars should be without insurance. Firstly, it’s illegal in most states to drive without auto insurance, and even though classic cars are only driven sporadically, it’s still enough that they need to adhere to automobile regulations. A ticket could cost you more than the car would cost to insure for one whole year.
However, there are instances where you won’t always pay less to insure a classic. Classic cars, unlike regular automobiles, become more valuable with age. Any other new car will start depreciating the second it leaves the dealership, but classic cars, after a certain point, begin to appreciate. If they are well-maintained, their replacement cost will be much higher than it is for new cars.
Like any other car, the cost to insure a classic car varies by location, driving record, car usage, and more. Working with an agent is the best way to get affordable car insurance.
Why do classic cars need special insurance?
Classic or collector cars are not only valuable but also require specialized care and maintenance. Because of their distinct characteristics and needs, classic cars require special insurance coverage that differs significantly from standard auto insurance.
As mentioned above, the value of a classic car is often significantly higher than that of a standard vehicle and it appreciates with time. Special insurance policies typically offer “agreed value” coverage, which means the insurer and the car owner agree on the car’s value at the time the policy is written. This ensures that in the event of a total loss, the owner will receive the full agreed-upon amount, rather than a depreciated value.
Classic cars are also not used as primary vehicles or driven regularly and are used solely for special occasions. Classic car insurance takes this into account, offering policies tailored to limited usage. This can result in lower premiums compared to regular auto insurance, which assumes daily use and are much higher mileage than classic/collector cars.
There is also special consideration when insuring classic cars due to the uniqueness of their repairs. Repairing a classic or collector vehicle often requires specialized knowledge and skills, as well as rare/custom-made parts. Standard auto insurance may not cover the costs associated with these specialized repairs. Classic car insurance policies often include provisions for using original parts and cover the higher costs associated with maintaining and restoring classic vehicles.
Liability insurance often comes with additional implications. Classic cars often draw attention and can attract larger crowds at events. This increased exposure can raise the risk of accidents or incidents involving the car. Special insurance policies for classic cars often come with higher liability limits to provide additional protection in case of any damage or injury claims.
How do I get insurance for a classic car?
Working with an agent is one of the best ways to get affordable insurance for your classic car. Not only will an agent be able to help you find an insurance policy that meets the needs of your exact classic car, but they’ll also be able to find you a great price! Call AHI Group at 913-839-1478 for a free quote.
