5 Things to Know About Classic Car Insurance

With warmer weather around the corner, classic car owners are beginning to take their beloved vehicles out of storage for the driving season. Agents may find this an opportune time to contact their clients to review their policies and make sure they have the most appropriate coverage for their automobiles.

Classic car insurance companies have the ability to offer superior coverage at lower premiums and can provide other benefits specifically tailored to collector cars. Policy options often include repair shop of choice, roadside assistance with guaranteed flatbed towing, and coverage for spare parts and tools.

The main difference between a specialty classic car carrier and a standard auto carrier is the type of policy offered and how the policy accounts for a vehicle’s value. Guaranteed (or agreed) value coverage is typical for most companies specializing in classic car insurance, while a traditional auto policy writes an actual cash value (ACV) or stated value policy.

Guaranteed value coverage means the owner and insurance provider agree upon the car’s value at the time the policy is issued, and that value will not be depreciated in the case of a total loss. An ACV or stated value policy will potentially depreciate the car’s value, reducing the amount of the claim. This difference is particularly important because most classic cars appreciate in value over time, while most modern cars depreciate.

Coverage Considerations

Here are some tips to consider when selecting insurance coverage for your clients’ classic car(s).

Classic car owners are passionate about their vehicles. Many collector car owners have an emotional connection to their automobiles. Perhaps their classic is a family heirloom or the first car they bought as a teenager. There is often a sentimental value far greater than the actual dollar value. The opportunity to provide your client the best protection for something they truly cherish can make a significant impact with them.

Properly value the car. It is important to accurately value your client’s vehicle when seeking a classic car insurance policy. Speak to a representative at the classic car insurance company or consult a price guide. There are a number of classic car price guides available to research current market values, including Hagerty Price Guide, NADA and Old Cars Price Guide.

Work with a company that deals exclusively with classic cars. They understand the unique needs associated with older, collectible vehicles and will usually save the client money. Because specialty insurers recognize that the risk for loss is far less in a classic car than in a regular-use vehicle, the premiums are often much lower.

Also, look for a company that handles claims in-house. An in-house claims department makes for more efficient claims handling and ensures that the person handling the claim has experience with the unique needs a collector car may require during the repair process.

Roadside assistance should include flatbed towing. Classic car owners are six times more likely to experience a break down than a claim. There are many types of roadside assistance programs available along with insurance policies, but make sure a guaranteed flatbed tow truck is included to fully protect your vehicle. Flatbed towing is one of the safest ways to transport a car because all wheels of the towed vehicle are off of the ground.

Always keep a classic car insured. Many mistakenly assume that the homeowner’s policy will cover the full value of their car when it is in their garage. It is important to maintain coverage even if the vehicle is at a shop or in storage and not being driven. In the event of fire or theft, your client will have to absorb the entire loss if the vehicle isn’t covered.