For many enthusiasts, shopping classic cars can be a process requiring weeks, if not months, of research. The reward is finding just the right classic collectible at a price that fits your budget. Part of that research, though, should include investigating insurance options.
A number of insurance companies specialize in insurance for classic cars. Those that you may be familiar with include Hagerty, Grundy, Chubb and J.C. Taylor. Any insurance research you do should include at least one of these specialty companies. As with any insurance, a policy for your collectible should provide all the coverage you need at the most affordable price possible.
Why Specialty Insurance?
Think of a collectible car as a thoroughbred horse that’s won its share of races and now is put out to stud. Although its primary function has changed, it remains valuable, perhaps even more valuable than when it was competing. You need an insurer that understands the differences between an everyday driver and a collectible.
Unless they are in a museum, the majority of collectible cars spends most of the time in their owner’s garage, where they are protected from the elements and the potential dangers faced by cars driven every day. Maybe their owners put a few miles on them on an occasional sunny Sunday afternoon or trailer them to a classic-car show somewhere, but basically they sit safe and sound in a garage. Insurance carriers specializing in collectible cars understand this, fixing premiums accordingly.
Because a collectible’s value can actually increase as it ages, specialty insurance companies recognize that, often, purchasing a collectible is an investment. It can appreciate in value, unlike the cars most of us drive daily that lose value (depreciate) as they get older.
No matter which insurance carrier you choose, according to the consumer advocacy organization ConsumerAffairs, there are some checklist details to address before stroking out that premium check.
What’s Your Collectible Worth?
That’s the big question. You want to ensure that if your classic is totaled, you recover what it’s worth from the insurance company. Many specialty carriers will establish a guaranteed value that they will pay you in the event of a total loss. Having a professional appraise the collectible as part of the purchase process is a sound way to establish its value. Make sure you and your insurer agree on the value.
How Will You Use the Car?
Insurance carriers can be very specific about the circumstances under which a collectible is covered. When applying for insurance, you should have a fair idea of who will drive the car, how much it will be driven, when it can be driven and where it will be stored. Most specialty insurance companies will tailor the policy (adjusting the premium accordingly) to your individual needs. If a restoration is in your classic’s future, make sure it will be covered when in a shop out of your immediate control.
What it means to you: Insuring your collectible should cost a fraction of insuring a newer car, but getting the best coverage for the most affordable premium requires a little elbow grease. Classic cars are a different animal. You need an insurance carrier that gets that.