Insurance for Car Collectors: Antique, Classic and Investment
Beauty is in the eye of the beholder, and for some collectors, there is nothing more personal or gratifying than sourcing and owning a particular vehicle that often times comes with a higher value and a significant time investment.
For some policy holders, classic vehicles are meant to be driven, and alternatively for some, the original styling is to be appreciated in a controlled environment or museum style quality. Either way, classic vehicle owners need to understand some very important auto policy betterments and restrictions when it comes to properly insuring their auto collections.
Limitations with certain Insurance Carriers
- Confirm that your vehicle is characterized as a ‘classic’ with your insurance carrier. This will typically establish Agreed Value Settlement, and ensure that your vintage vehicle that has been meticulously restored is insured for the full value, not the value based upon the original retail price, minus depreciation.
- Some insurance carriers have a lack of comfort and knowledge when it comes to antique and classic vehicles. Even if the insurance company initially approves a vehicle’s value, a claim could be challenging because some insurance carriers are not familiar with high value, low production, hard to source vehicles and parts.
- Agreed Value – With agreed value, insurance companies adjust claims through a settlement valuation process that is agreed upon by both the policyholder and the insurance company in the event of a total loss. Agreed value is perfect for high value, low mileage automobiles.
- Actual Cash Value – A standard means of determining what the insurance company owes you based upon current market value minus depreciation. This settlement that leaves the policy holder at the mercy of the insurance carrier’s terms on what they will pay the policy holder.
Parts and Equipment
- After-Market Tools & Equipment – Take inventory of your extra parts and ensure that you have coverage for items including: Extra Rims, Wheels, Removable Targa or Hard-Tops, tools and servicing equipment for a personal garage.
Media, Phones and other Personal Belongings
- Items that are not permanently installed in your auto are not traditionally covered under your personal auto policy; they are typically considered ‘personal contents’ and covered under you home policy. Certain insurance carriers may offer a lower limit for contents located in your vehicle in the event of a theft or break in.
- Most insurance carriers provide an option to have full glass coverage provided for a $0 deductible. Certain autos can have windshield replacement that requires OEM parts to be shipped, and the expense can be fairly eye-opening. Ensure that you have full glass coverage to avoid this issue.
Servicing Options and Towing Coverage
- Virtually all insurance carriers offer a basic Towing Allowance or Roadside Assistance. In the event of a loss, you want to ensure that your servicing dealership or service provider gives you clear and precise servicing terms and suggestions to avoid additional damage that a traditional towing company may cause. Roadside assistance is typically afforded to help with vehicle disablement, dead batteries, empty gas tanks, flat tires and lock outs.
- Outside of expensive and very restrictive, specialty policies, virtually all insurance companies have firm exclusions for physical damage, bodily injury and personal liability – leaving the policy holder without coverage. When the auto is used for any track event, speed event, practicing or training for any timed event or concorso – there is no coverage for property damage, bodily injury or personal liability based upon policy exclusions.
- If you choose to “race” your vehicle, and you are familiar with the coverage exclusions on a traditional auto or personal liability policy, there are physical damage only policies for sporting cars, garaged at a track, that are primarily used for track events and shows. Coverage for the auto is only afforded while garaged or otherwise not in operation.
Usage and Mileage Restrictions
- Most classic auto owners keep the mileage low, and do not drive their autos as a primary vehicle. This lowers the wear and tear and the risk as perceived by the insurance carrier which keeps the premium lower. Make sure that you state the approximate mileage that you intend to have on the vehicle in order to save on costs.
- Membership in a car club includes regularly scheduled member events, car shows and gatherings, which are smiled upon by many specialty auto insurers that specialize in classic and collector vehicles. Coverage is excluded when the classic vehicle is being marketed and rented for events such as weddings, corporate events or being used as a means of additional income; which enters the policy holder into a business exposure requiring a commercial insurance program.
- Vehicles that are collected strictly for investment and auction, and otherwise rarely driven, can be insured on a specialty policy that lowers the premium based upon the lower risk of an auto accident.
Youthful Operators / Attractive Nuisance
- Teenagers love flashy, fast, expensive, forbidden-to-drive vehicles. You were a teenager once, and you know exactly how you would have driven one. Teens can ruin your clean insurance record and cause significant premium increases after a loss. Have a discussion with your kids, make rules, and try to keep them out of the driver’s seat without your permission.
- “Gifting” a vehicle to a child or household dependent also comes with some unique insuring challenges. The vehicle title should match the insured person listed on the policy.
- Many insurance companies require youthful drivers to have 5 years of driving experience or to be 25 years of age, or more, in order to have a policy written in their own name for an exotic or collector vehicle (non-primary use).
- Parents still share potential liability damages even if the auto is titled in the child or dependent’s name. Auto liability limits need to be adequate to ensure that in the event of an at-fault claim, there is adequate coverage to address damages and legal fees associated with the impending claim and lawsuit that may be brought against multiple family or household members.
Swingle, Collins & Associates specializes in insurance for car collectors. The descriptions of coverages listed on this website are brief and subject to the provisions, limitations, and exclusions that can only be expressed in your policy and related endorsements. For additional information of how Swingle, Collins & Associates can assist in meeting your coverage needs for insurance for antique, classic or investment cars, please contact your dedicated risk manager to discuss the benefits and services of personal homeowners insurance coverage.
The information contained on this page is provided for informational and educational purposes only. It contains general information on insurance issues and may not reflect the most current developments in insurance coverage and is unlikely to apply in all factual scenarios. The information does not include all the terms, coverages, exclusions, limitations or conditions that may be contained in the actual insurance contract language. The policies themselves must be read for those details. Sample policy forms will be made available upon reasonable request.