Cover Your Classic!

By Eric Peters, Automotive Columnist

Antique cars are special cars — and need special insurance coverage. If you don’t take the time to get a policy issued by a company that deals specifically with insuring antique and collectible cars, you’ll probably pay more — and get less coverage.

Here’s why:

If you buy a conventional insurance policy for an antique vehicle (in most cases, this is defined as a vehicle that is at least 25 years old) the coverage will probably be liability-only, because most conventional insurance policies base their coverages on the average “book value” of a vehicle according to used car value guides. And the average car over twenty years old is, typically, a rolling wreck. If it’s even capable of rolling under its own steam. What this means is that if there’s an accident, only the damages to the other person’s car will be covered. You will have to cover the cost of any needed repairs to your vehicle yourself.

And if the car is beyond fixing, you lose everything.

The second problem with conventional insurance is the assumption that the vehicle is driven regularly. This means — you guessed it — you pay more. I don’t like the way most insurance companies do business, but I must concede that it’s not unreasonable to at least partially base premiums on risk exposure: The more a car is driven, the higher the odds that eventually, a loss will be incurred. Whether as a result of a deer springing into the road or a sail fawn-addled oblivio piling into you from behind when you’re stopped waiting at a red light — the odds stack up against you the more you’re in circulation. Well, conventional insurance assumes you are in circulation often. Even if the car is not listed as the “primary” car the policy will still assume it is driven regularly — and your rates will be charged accordingly.

Result? You pay probably more than you should be paying — and get minimal coverage in return.

With specialty antique/collector car insurance, the equation is reversed. You should end up paying less — and getting much better coverage. Coverage that will actually pay to get the car fixed if some bozo hits you — or, in the worst case, console you with a check for the car’s fair market value, so that you can go out and buy another.

Specialty insurers such as Hagerty, J.C. Taylor, Condon and Skelly, and American Collectors Insurance issue what’s known in the biz as “agreed value” policies. These are based not on generic “book values,” like conventional insurance policies — but on individual car-by-car appraisals and the more accurate valuations of the collector car (vs. used car) marketplace. Such insurers know that (for example) a mint condition ’76 Trans-Am like mine is not just an old car, but a classic muscle car. And they know that my specific car is in excellent condition — not a decayed hulk with weeds growing through the floorpans.

The policies acknowledge explicitly — in legally enforceable, contractual terms — that it would cost a lot more than the generic amounts listed in most used car guides to replace such a car. So, to use my situation as a case-in-point, the policy I’ve got has “agreed value” comprehensive coverage that’s in line with the actual market value of my specific car. If someone hits me and totals the car, I get a check for that specific amount — not an “adjuster’s” lowball.

Of course, it was necessary for me to document the actual condition of my car before the policy was issued. Most specialty insurers will either send an an appraiser to look the vehicle over — or ask that you provide documentation, such as detailed photographs of the car, receipts, etc. to back up your statement as to its condition. You’ll also be asked (and may be required to document) whether the car is kept in a secured, protected environment such as an enclosed garage — as opposed to being parked outside where it’s exposed to the elements. And potential thieves. Also, any modifications performed on the car — such as engine upgrades to boost the factory-rated horsepower — may affect the final quote.

Another point: Almost all antique vehicle insurance policies are issued with the caveat that the car can’t be driven regularly. There are typically mileage restrictions of about 2,000 or less annually. It’s common for the insurer to require that the vehicle be registered as an antique with your state DMV and wear Antique Vehicle tags, which are limited use tags.

In my case, each year at renewal time I am required to provide an odometer statement. If I exceed the stated maximums, I have violated the terms and conditions of the policy. And if the cops see me driving my old Pontiac every day, I could be ticketed, too.

So, if you drive an older car every day, or use it as your primary form of transportation, antique vehicle insurance is probably not for you.

The upside is that, because of the decreased exposure to risk that’s inherent in insuring an infrequently driven antique, the premiums tend to be much lower. For example, when I first switched from conventional coverage that treated my classic Pontiac as though it spent two hours every day in heavy Washington, D.C. traffic — with all the risk that entails — to an antique policy that assumes the car mostly sits under cover inside my garage — I cut my insurance costs in half and also increased my coverage from nil to “agreed value.”

It’s peace of mind — and a great way to save a good chunk of change.


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