Many people have trouble with classic car insurance because, if you want to insure the car for the amount that it is worth, then you cannot drive it as much as you want to; and if you insure the car so that you can drive it as much as you want, you probably cannot insure the car for as much as it is worth.
If you insure your classic car with regular car insurance, then you are taking a risk that the car will be insured for its actual value rather than the value that it has in the eyes of a collector. The actual value of a car takes into account the car’s depreciation over the life of the car. When a car becomes a classic, it is no longer of an age that it will depreciate over its life. Classic cars are usually of the age that there are less and less every year and there certainly are not new ones being made. If you invest in the right classic car then the value of the car will probably increase over its life.
Most collectors shop for a classic car insurance that covers their car for a value that is agreed upon between the collector and the insurance agency. When buying insurance, it is important that you understand the full value of the car so you get reimbursed for that amount in the event of a crash.
In order to get a good idea about how much your car is worth and how much insurance you need, you should either consult an appraiser or a pricing book such as the Old Cars Weekly Pricing Guide or the NADA pricing guide. Unfortunately, these guides do not take into account the amount of work or money that most collector car owners put out to get their cars in pristine condition. If you want to prove how much a restored classic car or a custom built hot rod or custom car is worth, then you may want to bring in an appraiser to declare how much the car is worth. In order to prove to an appraiser how much time and money went into your car, you should keep records of exactly what you did to the car and save receipts for the things that you bought for the car.
In order to make sure that your car is being insured for its full value, you need to make sure that you adjust your insurance every couple of years to compensate for appreciation. Some insurance policies adjust for your car’s appreciation. Some policies, which generally cost more, automatically adjust for your car’s appreciation every two years or so. If your policy does not automatically adjust, it is important that you keep track of the value of your car and have it appraised and reinsured when necessary.
Unfortunately, classic car insurance policies that take into account the agreed upon value of collector cars limit the amount that you can drive the car each year. Depending on how much you have insured your classic car for, your insurance policy may limit the number of miles you drive your car to anywhere from 1,000 to 3,000 miles a year. If you want to drive your classic car more than 3,000 miles a year, then it may be hard to find an affordable insurance policy. Many classic car insurers require that you keep your car stored in a garage or provide your car with fire protection.
By Alex Turman