How to insure your four-wheeled baby.
If you have a car, you need insurance. And that’s true whether you have a 2018 Subaru Outback, a 1967 Ford Mustang, or a 20-car Porsche collection housed in a three-story garage. Getting car insurance for the Subaru can be done online easily, but getting insurance for the Mustang or your Porsche collection can take a few more steps.
Read on to find out how to insure your classic, custom, or collector car:
According to the Insurance Information Institute (III), there is no one definition of a classic car. The Classic Car Club of America defines “classic” as a car built between 1925 and 1948, but the closest thing to a uniform definition is that if your car’s current value exceeds its original selling price, then it’s likely a classic car — and qualifies for a classic car insurance policy.
Examples from the III of vehicles that generally need classic car insurance include:
In addition to a qualifying vehicle, classic car insurance policies also have requirements on how you use the vehicle. These include:
Limited use requirements: The classic car can’t be your primary vehicle, and there may be maximum usage and mileage requirements. Many policies also include travel restrictions, so if you’re planning on driving your car often (or even sporadically to car shows), ensure that you purchase a policy that permits it.
Secure storage requirements: Classic car policies often require that your vehicle be in a locked garage or storage unit.
Good driver requirements: To qualify for a classic car insurance policy, you need to have a clean driving record; insurance companies won’t issue policies if you have serious offenses on your driving record.
Classic car insurance largely works the same as standard auto insurance, including liability coverage, collision coverage, comprehensive coverage, and medical payments coverage.
One big difference: in the event of a total loss, classic car insurance pays out the agreed or guaranteed replacement cost. This differs from standard car insurance, which pays out the car’s value at the time of the loss, also known as the actual cash value.
Classic car insurance also features other specialty coverage:
Roadside assistance: Pays for flatbed towing in case of a breakdown or accident.
Traveling coverage: Pays for food, lodging, and additional expenses if your car breaks down on a trip.
Auto show medical reimbursement: Pays medical payments if someone gets hurt in or near your car at an auto show.
No attendance required coverage: Covers your vehicle at an event or auto show even if you’re not there.
Spare parts coverage: Provides coverage for spare parts for the car.
Like standard car insurance, classic car insurance premiums are affected by a number of factors, including the type of car, the age of the driver, the driver’s record, and the location. But even though classic car insurance is designed for expensive collector vehicles, it actually can be less expensive than a standard auto insurance policy. The reason? Because classic cars are rarely driven.
Most classic car insurance policies come with strict mileage limits, and the lower those limits are for your policy, the lower your premiums will likely be. Cars kept year-round in climate-controlled showrooms will have lower premiums than cars that are driven often.
The average cost of a personal car insurance policy is just $866 a year, or $72 a month. Collector policies can be half that or less for inexpensive collector cars driven infrequently.
One rough way to estimate classic car insurance annual premiums is to calculate 1% of the agreed value (so $250 per year for a $25,000 car, or $2500 for a $250,000 car), though again, driver experience, vehicle usage, and location can affect those numbers. Your best bet is to get a quote from a classic car insurance company (see below).
There are a few questions you need to know the answers to before you shop for classic car insurance quotes:
What is your car worth? Your insurance company will have its own ideas, but you should come into the quote knowing what you think the car’s worth is, based on what you paid for it or what similar models have sold for recently.
How often do you plan on driving the car? Different companies and policies will have drastically different rules for how often and how far you can drive your car each year to qualify. Some policies may let you drive the car as often as you like as long it’s not your primary vehicle, while others will have strict mileage requirements.
Who will be driving the car? Some insurance companies have strict age limits on the drivers who are permitted to drive the cars they insure; if you are under 25 or have a driver under 25 who needs to be insured with the car, keep that in mind. (Some companies will insure younger drivers with clean driving records, but some will only insure drivers or 25 or even 30.)
Do you expect the car to increase in worth? Some classic car policies include protection called inflation guard, which increases the value of your policy along with the value of your car.
Do you need spare parts coverage? Spare parts on classic cars can be expensive, so some insurers offer additional coverage in case those parts are stolen.
Are you restoring your car? Some companies offer policies specifically for vehicles under restoration. These policies will increase the insured value of your car by a certain amount each quarter to keep up with restoration. You also have an option of including insurance coverage for the tools you’re using for the restoration.
Is it worth bundling your insurance policies? If the company that provides your standard car insurance policy also offers classic car insurance, you may get a discount for bundling. And if not, it may be worth switching your standard insurance to a company that will let you bundle!
Not all car insurance companies offer classic car insurance policies, but some do. There are also some independent insurers who only offer classic car insurance policies. Some of the more well known and respected of these companies include:
Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.