Collector car insurance is a major concern for the discerning owner of an antique or well-restored classic car. Many classic car owners have spent years fixing and restoring their cars, so they naturally worry about theft, fire, extreme weather, collisions, etc.
The business of insurance for collector cars runs a little differently than insurance for normal vehicles. For example, if your Ford Taurus is wrecked or stolen, it is easy for you to find another similar vehicle, and it is easy for your insurance company to asses your car’s value. However, if your 1955 Ford Thunderbird disappears, it is not as easy for you to quickly replace it. Additionally, you may have a more difficult time proving your car’s value, since not all ’55 T-birds are in equal condition.
The reason many collectors insure their collector cars with specialty insurance providers is based on how different insurers figure vehicle replacement values. A collector car insurer will agree to a stated value of a collector car, and that value will be what is paid in the event of a total loss. A standard auto insurer, on the other hand, will use the industry standard of “replacement cost minus depreciation.” Standard auto insurance can be problematic for collectors, since most collector cars do not depreciate in value.
Generally speaking, the insurance premiums for collector cars are usually much lower than the costs of standard auto insurance. This is because collector vehicles are driven on a very limited basis and are usually required to spend the rest of the time garaged, away from Mother Nature. Therefore, the risk of loss to collector vehicles is much lower than the risk of loss to regularly-driven vehicles.
The amount of miles you drive your collector car per year will have a great effect on your insurance premiums. For example, most collector car insurers allow only 2,500 miles per year. A few insurance companies offer higher mileage polices allowing up to 5,000 miles annually, but the premiums will likely be about 30 percent higher because of the additional exposure to potential harm or accident. If you drive you collector car more than 5,000 miles annually, you will probably not qualify for collector car insurance. However, you can obtain a “stated amount” policy from your regular insurance, but at a higher price.
Determining the value of your collector car to insure it can be a bit tricky. One option is to track the selling prices of cars similar to yours. You can get auction results that list the vehicles sold and for what price. A second option is to compare asking prices in recent ads for cars similar to yours. Value guides, such as Manheim Gold Book, or NADA Guide, can be a helpful resource for collector car values. Finally, you can have a professional appraisal by a certified appraiser, which may cost you some money but will ultimately be the most accurate.
No amount of collector car insurance can guarantee that your ’55 T-bird will be protected against harm, but there are things you can do to hedge against theft and damage. You should know how statistically susceptible your vehicle is to being stolen. For example, California, Michigan, and Florida are the top three states and June, July, and August are the top three months for collector car theft. Contrary to past trends, more classic cars are stolen today from owners’ driveways and garages rather than from public streets or parking lots.
Many collector cars have primitive locking systems, if any at all. It is important for you, as a collector car owner, to take the proper precautions against theft. You should park in well lighted areas, use visible theft prevention devices, invest in a theft recovery device like LoJack, and consider additional vehicle identifiers like window etching. Remember that a skilled car thief can steal nearly any car if given enough time, but these efforts will give you greater peace of mind and perhaps lower your collector car insurance premiums.
By Aaron McCullough