What is a Classic vs. Collector Car?
There are factors that separate collector and classic cars. Vintage cars are older than 25 years, while collectible vehicles include late models, exotics, luxury cars, and super-performance automobiles. While most collector cars receive storage as garage queens, some collectors drive their cars mainly for pleasure.
The manufacturing date determines whether a car is antique, vintage, or classic within the car collector industry.
- Vintage cars produced between 1919 and 1930 received the classifications of "survivor" or "restored" (according to the specifications of the original manufacturer) status.
- Antique cars manufactured in 1975 or earlier than 45 years. As with vintage vehicles, the status is "survivor" or "restored" (according to specifications) status. Some models from the 1950s are iconic symbols of America's postwar golden age. In that era, one of six jobs was due to manufacturing and sales of automobiles in the U.S.
- Classic cars have a manufacturing date of 2002 or earlier than 20 years old.
What is Collector Car Insurance?
Collector Car Insurance is like a traditional auto policy. Its coverage depends on the vehicle's value. Additionally, it also depends on usage, storage, and other factors. For example, a Collector Car policy covers property damage and bodily injuries, whether driven for pleasure or attending collector vehicle events. Should the vehicle suffer damage in a covered event or create liability insurance losses, the insurer pays for repairs or losses up to policy limits. Deductibles are usually lower than offered on standard auto policies; some policies offer deductible-free coverage options.
What are the Benefits of Using a Collector Car Insurance Specialty Program?
Generally, specialty programs for collector car insurance are less expensive than standard insurance policies. For example, the annual insurance premium can be 500 percent more than those from a specialty broker. However, traditional insurance policies usually cover the daily driver, but they don't always include the extra benefits of collector car coverage.
Shopping among providers is an excellent suggestion because providers and policies are different. You will find various service levels, rates, types of coverage, and claims handling that vary between programs. Beyond comparing rates, Collector Car Insurance is a "service" that comprises customer service, claims handling, and perhaps most importantly, a knowledgeable staff experienced in insuring collector vehicles.
Types of Car Insurance
The automobile insurance industry offers three types of policies:
- Actual Cash Value (ACV).
- Stated Value.
- Agreed Value.
Actual Cash Value
ACV coverage is the type found in standard auto insurance policies. As the name indicates, the policy pays claims on the insured vehicle's depreciated "book" value because everyday cars lose value as they age.
Stated Value
Stated Value insurance is better than an ACV policy for collectible vehicles. They allow the insured to "state" a value for their collectible vehicle greater than its depreciated "book" value. And conversely, if insuring the collector car is too expensive, a Stated Value policy is an option to get coverage up to policy limits.
For example, suppose the insurance premium for a rare vehicle with a total value of $1 million is too costly for an insured who instead purchases a $100,000 Stated Value policy. That way, they have some coverage for non-total losses while accepting the risk of a total loss beyond their $100,000 policy limit. So it's not an ideal situation, but it is an option better than the perils of bare risk.
Agreed Value
Usually, an "agreed value" will determine the classic car insurance policy. Its features give collectors peace of mind knowing their car's insured value is mutually agreed upon before claims occur. Agreed Value is the best option for collector car insurance because it is the only type of coverage that guarantees the agreed-upon full value receives payment in a total loss minus any deductible.
An Agreed Value Policy has some benefits, as there is no depreciation and no misinterpretation because the predetermined agreed value is what it is. Therefore, both the insured and insurer decide on an acceptable value of the vehicle using market data, the vehicle's condition, and other factors when setting up an Agreed Value policy.
Since there is no depreciation factor in settling claims of Agreed Value policies, the settlement will include all applicable taxes and fees associated with the claim in total loss cases. Because of the set value, the insured and their agent will need to adjust the policy limits manually should the car's value change.
Standard Auto Insurance versus Collector Car Insurance.
Market value and factory-installed accessories determine the standard auto insurance claims. Unfortunately, that approach to settling insurable losses doesn't work for classic car collectors who invest substantial time and money into restoring their vehicles. For them, it's crucial to have the protection of agreed value coverage in the case of a total loss settlement.
Some specialty collector auto policies offer typical daily-use auto insurance with stated value coverage. Essentially, such stated value policies form actual cash value coverage with a maximum limit. For example, the insurance company pays claims based on the indicated market value of the vehicle after a loss. So, If the vehicle's market value has dropped after purchasing the coverage, then the payout is based on the lower dollar amount.
Considerations for Collector Car Insurance Programs.
If you have clients or prospects who collect classic cars, that's a good situation because of their favorable demographics. You’ll want to court them for their other insurance needs. That means it’s usually advantageous to work with a broker who can package additional coverages.
Another significant benefit of classic car insurance policies is the agents, adjusters, service reps, and others usually are familiar with the intricacies of collector car insurance programs. Because they're specialists in insuring rare and antique cars, they can give your clients the best service and help when they need it.
Who Qualifies for Collector Car Insurance?
- Someone who has had a driver's license for five years.
- Excellent driving record with a maximum of one moving violation or one at-fault accident within the last three years with a maximum of two per household. Any DUI or reckless driving violations must be ten years or older.
- Households must have at least one regular-use vehicle for each licensed driver, although some exceptions for full-time students and retired couples are possible.
What Kind of Cars Qualify for Classic Car Insurance?
Vehicles that have worth as collectible and show value through appreciation are eligible with these limitations that require the car is:
- Driven only occasionally and never as a daily driver with a typical cap of 7,500 annual miles.
- Never utilized in racing, including timed events, driver's education, or commercial purposes.
- Stored in a locked, enclosed garage with the potential for alternate garaging options on a case-by-case basis.
Additional Insurance Coverages for Classic Car Collectors
There are other coverages specifically available for classic car insurance:
Roadside assistance: Although standard policies offer roadside assistance, they allow for towing the vehicle with a hook. Whereas towing a collector car requires a flatbed truck.
Increased replacement cost: Pays the difference in claims when the classic car's value rises past the agreed-upon value; this coverage will cover the difference.
Auto show medical reimbursement: Provides liability protection that pays medical and legal costs of a person injured while visiting the insured's space at a collector's car show or similar event.
Spare parts coverage: Pays to replace spare parts for collectible cars that are damaged or stolen stored while stored in a garage or during a classic car show.
Classic car insurance carriers can provide your clients with most standard types of car insurance, including liability, personal injury protection, uninsured motorist coverage, and comprehensive collision coverage.
Collector Car Insurance Costs (and what factors affect the price)
Collector car insurance typically covers unique, vintage, and classic vehicles at a lower price than a standard auto insurance plan. In some cases, the cost is substantially lower. Factors affecting the rates for collector car insurance include the vehicle’s type and condition, the purchase location, and the driver's age and driving record. Lowering the mileage limit for classic cars and storing them in a climate-controlled garage year-round are other ways to reduce insurance premiums.
Best Collector Car Insurance Programs
It's natural for agents to seek the best collector car insurance programs and coverage for their insured. We created the ProgramBusiness.com platform to make it easy for agents to connect with carriers, MGAs, wholesalers, and program administrators. Performing a search of the Program Business Market Directory for collector car insurance programs returns a listing for American Collectors Insurance. Its staff of knowledgeable Collector Car Insurance specialists is ready to help you design a comprehensive program to fully insure your client's needs for affordable specialty classic car coverage.