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A vintage car is like fine wine: It increases in value as it ages. If you own
a classic four-wheeled beauty, you want to be certain you have enough insurance
to protect it — and that requires specialized car insurance.
When a car is totaled, a standard car insurance policy cuts you a check for the
car's actual cash value (ACV), which takes into account its depreciation.
Cars are worth less every year. Antique or classic cars, however, not only hold
their value but also increase in value. So you need to find a car insurance
policy that protects the full value of your car.
You want an insurance policy that offers "agreed value." That means you and your
insurance company predetermine the dollar value of your vintage car and, in the
event of a total loss, you will be paid that exact amount.
How do you determine the value of your car? You can hire an appraiser, but most
classic car insurance companies don't think it's necessary. If you have a stock
original vehicle (one to which you haven't done any work or added anything),
there are many resource guides and pricing books, such as the Old Cars Price
Guide or the NADA Guides that will give you an accurate estimate of your car's
value. If you've made improvements or additions to the car that you believe
increase its value, you need to hire an appraiser to support your claim.
If you have a newly restored vehicle or a street rod, the price guides are not
helpful. According to Hagerty Classic Insurance,
people restoring cars or building a street rod should keep detailed lists of the
work performed and receipts for all parts and labor. "Some companies will
require appraisals at the owner's expense to establish the agreed value, while
others may not. . . . The best companies will not require appraisals and will
rely on your opinion to help determine the proper insured value of your
collector car," according to Hagerty's Web site.
If you buy a car insurance policy that outlines an automatic value appreciation,
you won't have to review your policy as often. American Collectors Insurance,
for example, offers what it calls "inflation guard," which automatically
increases the vehicle's value by 2 percent each quarter, up to 8 percent each
year, at no extra cost. If, however, your policy doesn't have automatic
increases, you should review your policy and your car's value on an annual basis
to be sure you have enough coverage.
Qualifications
Both you and your car will have to meet certain qualifications to buy classic
car insurance. Perhaps most important of all is that you have a clean driving
record. One or two minor violations may be allowed, but that's it.
You'll also have to show that all the drivers in your household have access to
another vehicle for daily driving needs. For example, American Collectors
Insurance requires its clients to "drive the insured vehicle on a 'pleasure
only' basis." In fact, vintage car insurers will restrict the number of miles
you can drive each year. According to Hagerty Insurance, 2,500 miles has long
been considered the average annual usage, but a 5,000-mile option is often
available.
In addition, many insurers will require the principal owner and driver to have a
minimum of five years' driving experience. American Collectors and Classic
Collectors require drivers to have at least 10 years of driving experience and
Hagerty requires the insured to be at least 25 years old.
Most insurers will also require you to store your prized vehicle in a locked
garage when it's not in use. Some companies may require a security system and
even a sprinkler system. You also won't be allowed to use the car for things
like racing or commercial-transport purposes.
While the standard used to be that a car had to be 25 years or older to be
considered for vintage car insurance, the lines have blurred as car collecting
has increased in popularity. A car 25 years or older is now considered a vintage
car, but cars that are 15 years or older can be considered "modern classics" and
still qualify, according to Classic Collectors Insurance. New but extremely rare
cars may also qualify for this special coverage. You'll need to check with the
insurer on a case-by-case basis to see if your car qualifies.
Classic car insurance is much less expensive than standard car insurance because
of the restrictions. The liability portion of your vintage auto policy may cost
less than $100 per year. That's because your insurer knows you won't be driving
the car very much and, when you do, you'll be driving it very carefully.
The physical-damage portion of your policy (the part that covers theft,
vandalism and fire losses) will run you a bit more: about 1 percent of the total
value of the car. So if you have a classic car that's worth $100,000, you'll pay
about $1,000 for comprehensive and collision coverage. Obviously, pricing will
vary depending on the vehicle, where you live, how you garage your car and how
often you drive it. For example, a 40-year-old California resident with a good
driving record who owns a '67 Convertible Sting Ray (valued at $100,000) and
plans to drive it under 2,500 miles a year could pay a roughly $1,500 per year,
according to an online quote from Hagerty Insurance. At the same time, Hagerty
advertises that its average premium for a '65 Ford Mustang is around $110 a
year.
Some companies offer additional coverages specific to classic cars, such as
"restoration coverage" which increases the value of the car while an active
restoration project progresses, "auto show medical reimbursement" that pays out
if you're injured at an auto show or other car function, and automatic coverage
for new classic cars you add to your collection.
Article sourced from:
http://www.insure.com/car-insurance/vintage-autos.html |
