Collector Car Insurance

For most people, cars are just a way to get from one place to another. For others, cars can be a passion and a collector’s item. For people who appreciate cars as more than mere transportation, car collecting and restoring can be a very valuable and rewarding hobby.

Although restoring a classic car is a labor of love, a properly restored collector’s car can be worth a substantial sum of money. Due to their rarity, antique cars and other types of collectible automobiles are very valuable. In order to protect the time, effort, and value put into these cars, it’s important to insure them with appropriate collector car insurance.

Collector Car Insurance Definition

While someone can collect any type of car, the primary types of collector cars are antiques, rare models, and heavily modified “hot rods.” A vehicle can be classified as an antique once it’s over 20 years old, but most of the best-known antique cars are much older, usually from the 1950s, ’60s, and ’70s.

Rare vehicles may also be collector’s cars, and they might require unique insurance. For example, a car may be a prototype that was released in only a limited number. If only a few hundred vehicles were ever released, the car would be worth a substantial sum. Of course, because all of these car models will be equally rare, the value will remain high, and a collector policy may not be necessary.

How Collector Car Insurance Works

In order to obtain a collector car policy, you will need to get the vehicle appraised. This appraisal will provide the vehicle’s value to the insurance company and will serve as the maximum amount that the insurer will pay for a claim to the car. In some cases, the insurance company will require an adjuster to look at the vehicle prior to insuring to ensure that the appraisal is accurate.

Once the vehicle has been appraised, the insurance company may have further stipulations about how the vehicle can be used or what coverage it can carry. For example, the insurance company may require that the vehicle stay below a certain annual mileage. They may also require that the vehicle be stored or transported in certain ways. Each insurance company will handle this differently, so it’s a good idea to check with the insurer when obtaining your policy so that you are prepared.

Collector car coverage is often more affordable than standard insurance because collector’s cars pose little risk to insurers. The insurance company expects the vehicle’s owner to be very careful with the vehicle, so damage claims are much more rare for these vehicles than cars that are used regularly as commuter cars. This ensures a wide profit margin for the insurance company, allowing insurers to keep the premiums low.

If you need to purchase insurance for a collector car, the best way to find a policy is to search online. When you fill out a quote online, you can enter the vehicle’s year, make, and model. If the car is old enough to be a classic, you should immediately be matched with insurers that can provide coverage for that type of car. Otherwise, you may need to manually search for companies that insure collector cars. Either way, by searching online you can see the widest variety of companies that can provide the coverage that you need at the best price.

Read More: Does Geico offer classic car insurance?

The Difference Between Collector Car Insurance and Standard Coverage

Standard auto insurance companies will insure a vehicle at its market value, disregarding its appraisal value. This means that the car’s worth will be calculated based on the market value of any car of that same year, make and model is, regardless of its condition. Damage might be taken off the vehicle’s value as depreciation, but significant improvements from restoration may not count toward increasing the car’s value.

Because the vehicle is not insured at its true worth, the insurance company will not pay an appropriate settlement. For older cars, the vehicle may be worth essentially nothing. This means that if the vehicle sustains damage, the insurance company may wish to declare it a total loss, even if the damage is minor and the vehicle is fully restored.

In order to prevent this from happening, car collectors must purchase collector’s coverage. This type of policy is available from many insurers, including large companies and smaller niche companies that specialize in collector car coverage.

• Collector car insurance may offer agreed value coverage, which means that the insurance company agrees to pay a predetermined amount in the event of a total loss and may also have restrictions on how the car is used, such as mileage limitations. Collector cars are unique and have a high value.
• Standard car insurance typically only pays the actual cash value of the car at the time of loss, which may be less than the value of a collector car.

Learn More: Do I need liability insurance on a collector car?

When You Might Need Collector Car Insurance

If the vehicle is merely a showpiece that is never driven, you may not need to carry insurance on it. If the vehicle is ever driven on public roads, however, you will need to maintain at least basic liability insurance. It may also be a good idea to purchase at least comprehensive coverage on the vehicle to help protect it from vandalism, theft, and weather events. If you drive the vehicle frequently, collision coverage is also a good choice.

While the vehicle is being restored, you may not wish to carry as much coverage as you will once the restoration is complete. If the vehicle cannot be driven at all during the restoration, you can talk with the insurance company about putting a comprehensive-only policy on the car; this will keep costs low throughout the restoration while still providing a small amount of protection against possible damage.

Collector Car Insurance Examples

Case Study 1: The Antique Beauty

John owns a beautifully restored 1965 Ford Mustang, which is considered an antique collector car. He invested countless hours and resources into bringing the car back to its original glory. One sunny afternoon, while driving to a car show, John’s Mustang was involved in a minor accident caused by another driver.

Thanks to his comprehensive collector car insurance policy, John was able to cover the repairs and restore his beloved Mustang to its pristine condition.

Case Study 2: The Rare Prototype

Sarah is the proud owner of a rare prototype sports car, one of only a handful ever produced. Its uniqueness and limited availability make it a highly sought-after collector car. Sarah understands the value of her prized possession and wants to ensure its protection.

She obtained a specialized collector car insurance policy that took into account the exceptional worth of her vehicle. This comprehensive coverage not only safeguards her car against damages and theft but also provides adequate compensation in case of any unforeseen events.

Case Study 3: The Restored Classic

Michael is a car enthusiast who enjoys the process of restoring classic cars. He recently completed the restoration of a 1972 Chevrolet Chevelle. Since he plans to drive it frequently, Michael opted for a collector car insurance policy that offers both liability and collision coverage.

This comprehensive coverage protects him financially in case of accidents, damages, or any third-party liabilities while he enjoys cruising in his meticulously restored classic car.