About Collector Car Insurance

Once you've purchased your dream car, you may discover it's not possible to include the vehicle on your regular insurance policy.  The agent's insuring guidelines may indicate the vehicle may be too old to be covered by a standard policy. For example, some older vehicles like the fiberglass-bodied Corvette may also be excluded from regular policies due to the high cost of repairing the vehicle.

Specialized policies often require belonging to a club and limiting the annual mileage. Most of these policies will cover transportation to exhibitions, club activities, parades and very moderate occasional use. However, they usually won't cover the vehicle for routine or everyday driving.

Although, collector car insurance has been available for five decades, most owners of collectibles, specialty cars and street rods are still insuring them through a standard insurance company despite the higher cost and often more restrictive policies.

Standard insurance annual premiums can cost up to 500% more than those offered by a specialty program. Although standard companies provide adequate coverage for the "daily driver", they rarely offer the added benefits associated with collector car programs. One example is that a stock vehicle, valued at $10,000, can be covered by Classic Insurance for as little as $90-95 per year.

There are three types of automobile insurance offered today: Actual Cash Value (ACV), Stated Value, and Agreed Value. ACV coverage is what insures most everyday cars and pays out a depreciated "book" value in the event of a claim: the older a car is on an ACV policy, the less value it has. Some insurance companies offer Stated Value policies for collectibles. These policies are better than ACV because they allow you to "state" a value for your vehicle greater than its depreciated "book" value. But, Stated Value can still depreciate vehicles because the policies generally require the insurance company only to pay "up to" the "stated" amount. Only Agreed Value insurance policies guarantee you will get all of your money back in the event of a total loss. There is no depreciation of a car's value with an Agreed Value policy.

Hot rods and customs can also benefit from specialty collector insurance. Because the very nature of these cars is that each is unique, there are some differences in how they are insured. The difficulty is in determining their value. You can't just look in a value guide to see how much they are worth. So insurers review the mechanical and aesthetic modifications made to the car, its horsepower, suspension system, paint scheme, etc. It doesn't take long to determine a value based upon the base value of the car to begin with, then the parts and labor that were added. Quality of the parts and workmanship are important factors. And in some cases there is a premium put on cars that were "built" by well known or famous builders.

You can also insure even brand new exotic and sports cars. Among these, insurers tend to look for rare vehicles that will be used as a collector car rather than a daily driver; this indicates that the car will be kept in good shape and thus that the value will be maintained.

Many specialty programs strictly limit owners to driving their collector vehicles to 2,500 miles per year. They may even require annual odometer readings.

Enthusiasts like to share their collector cars with the public but they also just enjoy driving them around. While some programs require that collector cars are only to be driven in activities of public interest, most insurers also allow for and encourage the private enjoyment of collector cars. Go ahead and take that Sunday drive. Nevertheless, collectors should consider these types of restrictions and find a policy with flexible usage guidelines that best suits their overall needs.

There are some standardized rules for qualifying for specialty insurance. Most specialty insurance programs do not allow vehicles to be used for the commercial transportation of goods or passengers, for racing, or for daily transportation. Most require that all drivers be 25 and older; some even require that a person be 30 years old.

In most states, insurers charge a single liability charge no matter how many collectibles someone owns. After all, you can only drive one car at a time!

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