Antique Auto Insurance: Do You Really Need It?
Need insurance for an antique vehicle? Learn what you can gain with coverage and how to get it.
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The term “antique auto insurance” probably conjures up an image of someone desperately trying to insure something fragile like a rusty Model T. In reality, cars that need antique car insurance are anything but fragile. In fact, most are valuable enough to warrant this special kind of insurance so you aren’t in a hole should something unexpected and unfortunate happen to it.
Antique car insurance, just like any automotive insurance coverage, can be a confusing thing. Knowing the ins and outs and whether you need it or not for your ride will help you make the best decision to get coverage for your vehicle. Here’s everything you should know about antique car insurance.
Antique car insurance is all about protecting a vehicle that actually has value (often more valuable than its purchase price). Normally, you don’t need much car insurance for an old, used vehicle. New vehicles tend to have extensive coverage like collision and comprehensive insurance since they still have a lot of value for the first couple of years of ownership, but vehicles depreciate over time.
Most used vehicles are so depreciated that automotive insurance providers won’t pay out much (or anything) to repair or replace it.
With antique cars, however, insurance is a smart idea when a collector car is actually worth something. Value can be gained and enhanced by restoring a popular or in-demand vehicle, taking care of it, rarely driving it, and showing it off at automotive shows. Just like any vehicle, however, the more it’s used, the more likely it is to get in an accident. This is where antique car insurance comes in.
Traditional vs. Collectors
Traditional automotive insurance protects you from the great costs that can incur when something happens to you, your vehicles, or others while driving. There are different types of coverages, from basic liability insurance to comprehensive and collision coverage, that protect you in different ways from different issues.
The amount of car insurance you have is up to you, but most states at least require a basic level of liability insurance to keep you covered in case of an accident.
Auto insurance that pays out money for repairs or a vehicle replacement is based on the depreciated value of the vehicle. In other words, if you total a five-year-old car, you won’t get the same amount that you paid for it when it was new. Instead, the insurer calculates the depreciated value so you can theoretically buy the same make, model, and year like nothing happened.
This is easier said than done, but the logic is to simply give you the same replacement value instead of its original worth.
For older cars, there comes a point that the depreciated value is too low to be worth paying traditional insurance premiums. At this point, you’d be paying more money a month for a very small payout.
Collector car insurance is similar to traditional auto insurance but is generally meant for older vehicles that have retained value or have been restored to retain value over time. Unlike typical used cars, collectible cars tend to look and function as they did from the start. Some people buy such vehicles for the nostalgia of older eras of automotive design, while others simply buy and restore old vehicles for the investment opportunity or the challenge.
In either case, collectors car insurance functions like traditional auto insurance: Different types of coverage protect you, your vehicle, and others in case of an incident.
Collector car insurance comes in two basic forms: classic car and antique car insurance. The main difference between the two is the age of the vehicle. Classic cars tend to be at least ten years old and are appraised at or above their original value. Antique cars are older than classic cars. They represent the bulk of collector vehicles since all vehicles reach the typical age of the antique car classification at some point.
How Antique Insurance Works
On the surface, antique car insurance works the same way as traditional auto insurance: If something happens to the vehicle requiring a replacement, the insurance provider will issue a payout based on a certain value. Compared to traditional insurance, however, this value isn’t based on the depreciated value of the vehicle.
The true definitional age of an antique car varies between different insurance companies, valuation resources, and individual owners, but the average minimum age limit is around 25 years. Since these old cars wouldn’t have much of a payout with traditional insurance, antique car insurance works a bit differently in terms of the value of the car.
Instead of the depreciated value, antique and classic car insurance policies use an agreed or “guaranteed” value that is determined between the owner and the provider. Determining what the actual value of an antique car can be tricky. Vehicle owners are a biased source of valuation since most owners feel like their car is worth more than it actually is. This is why the agreed value is used to determine the possible payout of an insurance policy.
The provider will often use a professional appraiser, valuation guides, or original vehicle documentation to determine a value they think is fair. If the owner agrees with the value, an auto policy is drawn up and the car gets covered.
There are some advantages and disadvantages to an agreed-upon value. Compared to the calculated depreciated value of most traditional insurance plans, settling on an agreed value can be a process of negotiation unless the vehicle owner simply settles for whatever the provider offers. The agreed value may also fail to cover the vehicle’s worth if its value appreciated even more as time goes on. The reverse is true, however, with depreciation.
Is Antique Car Insurance Necessary?
Getting a lot of insurance for an antique car isn’t legally required, but it can be a good idea. Legally, most states only require a certain level of liability insurance to cover you in case of an accident you cause. If you don’t want or need additional coverage because you never drive the antique car and never take it out of the garage, you may find the monthly premiums to be unnecessary.
The more you use or show an antique vehicle, however, the more you should consider antique car insurance. Things can happen to any vehicle on the road, even if you aren’t driving it, regardless of its age. Collision and comprehensive coverage, for example, can cover your vehicle for accidents, bad weather, and unexpected incidents.
Some specialty providers even offer other options like restoration coverage and travel insurance as well.
Are There Usage Limits with Antique Car Insurance?
Typically, insurance providers like it when you use your antique vehicle as less as possible. While most don’t impose hard limits on how you can use your vehicle, there are some important mileage and usage limitations to check out when you are considering different options:
- Mileage: Common insurance providers will restrict how much you can actually drive your vehicle in a given year. This limit varies between providers, but most limits land somewhere between 5,000 and 10,000 miles per year. You may find some providers with unlimited mileage limits, but these tend to impose harsher usage limits, so you can’t use it as a daily driver.
- Usage: While most car collectors would prefer to keep their precious antiques locked up or on display instead of on the road, some antique vehicle drivers want to actually use their vehicle. Usage limits can conflict with that interest if you intended to use your vehicle as a daily driver. Occasional use is generally allowed, but most providers limit this use to driving for specific events, club functions, auto swaps, etc.
How Do I Get Antique Car Insurance?
Finding the right antique car insurance is a similar process to finding traditional auto insurance: You have to find the right provider, the right plan, with the right coverage and monthly premiums, etc. The first extra step to the process, however, is seeing if your vehicle qualifies for antique car insurance in the first place.
Criteria differ between different providers, so you will need to directly talk with individual providers to determine your eligibility. You can get a good idea by considering some basic factors:
- Age: Your vehicle will need to meet the minimum age requirement of the provider. Ten and 25 years are the most common, but some providers actually don’t have an age requirement. Instead, these providers use other criteria.
- Condition: An antique car that is eligible for car insurance can’t be just like any other used car. Most providers require its condition to be restored or close to its original factory condition. Some providers make exceptions for cars in the restoration process if they offer additional coverage for restoration work.
- Value: The value is often the most important determining factor of eligibility. If the vehicle doesn’t meet the limit (often at or above the original factory value), it won’t be insurable in the provider’s eyes.
Your eligibility for antique car insurance may also depend on you and your driving history:
- Age: Some carriers have a minimum age requirement of around 25 years.
- Driving History: All automotive insurance providers like to cover safe drivers. As a result, you will likely need a clean driving record free from major accidents and violations.
- Other Vehicles: Since antique cars are supposed to be more for show or for an investment, some providers require you to have another daily driver and regular automotive insurance to cover an antique vehicle.
It can be difficult to see if your vehicle is eligible with many different insurance providers, so you should narrow down the list of potential providers you want to check out before speaking with any particular one. For this task, you can have your own set of criteria to assess potential providers:
- Coverage: Consider what types of automotive insurance a provider actually offers for an antique vehicle. At the very least, you should consider ones that offer liability, collision, and comprehensive coverage plans.
- Premiums: Budgeting how much you will be paying for antique car insurance on a monthly basis will allow you to plan ahead so you don’t pay too much.
- Extra Perks: Extra inclusions and perks can tip the scales in favor of one provider over others. Typical perks include travel coverage, emergency, and roadside assistance, towing, and bundling options with other vehicles, homes, and entire car collections.
Notable Antique Car Insurance Providers
The list of insurance providers that cover antique vehicles is pretty extensive, but there are a few notable standouts that tend to offer more than the rest. Antique car insurance providers tend to fall into two main categories: major providers that offer other insurance policies and specialty providers that only cover antique and classic cars.
We tend to recommend specialty insurance providers since they usually offer better coverage and more plans than big players.
Hagerty is one of the few specialty car insurance providers that tend to embrace classic car culture. Offering flexible driving plans, a guaranteed value payout, restoration coverage options, and even automotive memorabilia and spare part coverage, it’s easy to see why Hagerty is a popular choice among collectors. The company even makes it easy to expand your car collection with new purchase coverage of up to $50,000. For true auto enthusiasts, the company also offers members-only events, discounts, and a club.
Grundy has some pretty solid roots with classic and antique car culture, given that its founder, James Grundy, invented agreed value coverage. Compared to other specialty providers, Grundy has a few more restrictions on vehicle usage. The car should be at least 25 years old, can’t be used as a daily driver, and requires a clean driving record. With that said, the company offers many flexible options with coverage limits up to $1,000,000, inflation guard, vacation coverage, and more.
Few companies actually really let you use your antique car as a daily driver. While some make exceptions for the occasional drive or transportation to events, Safeco is one of the few providers that include a regular use option of up to 10,000 miles per year. You can also get a more affordable occasional use option of up to 5,000 miles per year if you don’t want to drive your vehicle as much.
American Modern is one auto insurance provider that offers more flexibility in terms of the types of vehicles it covers and the plans you can get. The company covers exotic vehicles like military cars, fire engines, street rods, kits, and more. For plans, there are mileage options ranging from 1,000 miles a year up to unlimited plans. It also has one of the highest spare part coverage limits at $2,000. Insurance is also backed by Geico.
While it doesn’t stand out in any notable way, American Collectors is a popular choice for collector car insurance because of the sum of its offerings. It offers a generous mileage limit of 7,500 miles per year (with the Freedom Tier), and inflation guard if car parts and labor go up in price. There’s even a multi-car discount on policies with multiple vehicles.
Considering Antique Car Insurance
It’s not difficult to find the right antique car insurance provider for your coverage needs, but some research is required ahead of time. First and foremost, think about what you need the most. Different coverages will apply to different scenarios, so consider what potential accidents and incidents you want to cover.
Second, research your vehicle’s eligibility with different providers you are interested in. A quick phone call is usually enough to get this information. When everything is said and done, the right antique car insurance gives you the level of coverage you need without limiting the way you want to use your antique car.
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