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After spending months or years restoring your classic, vintage, or collectible car, it's natural that you'd want to take it on the road and show it off. Although you still need to insure your vehicle before you drive it, simply adding it to your regular insurance is not the best option and here's why.
You Won't Get the True Value
Regular auto insurance insures vehicles based on a model of depreciation. The older a vehicle is, the less it's worth. For instance, vehicles lose 19 percent of their value during the first year of ownership. So, if you purchased a $30,000 vehicle today and got into an accident a year from now, the replacement value would only be about $24,300. That's the maximum amount of money you would receive from the insurance company for the vehicle when you file your claim for damages.
Classic cars, on the other hand, appreciate in value over time after they've been restored. For example, the market value of a 1969 Chevy Camaro is approximately $22,700. However, that's amount reflects what other collectors are likely to pay for the vehicle. Because of its age, the vehicle has no replacement value under the depreciation model insurance companies use to price coverage for modern cars.
Thus, if you were to get into an accident, you wouldn't receive any money for it from the insurance company (or you would get a tiny fraction of the vehicle's value). So putting your classic car on a regular insurance plan may result in you losing a lot of money.
Specialty Insurance Required
If you want to make sure you get the maximum value for your classic vehicle if something happens to it, then you need to insure it with a special product called collectible insurance. Also called classic car insurance, this policy is different from a regular one in that you and the insurance company come to an agreement on the vehicle's value and that's how much you would receive if the vehicle was irreparably damaged or stolen.
Additionally, classic car policies typically have other benefits that are specific to collectible vehicles. For instance, the policy may cover medical costs if someone is injured by the vehicle while it's being displayed at an auto show or you'll be able to file a claim for reimbursement if someone steals the spare parts you have stored away to make repairs on the vehicle.
Classic car insurance is typically less expensive than regular insurance, but this varies depending on the vehicle. It's best to contact an auto insurance company for more information about this type of coverage and to obtain rate quotes.