According to Hagerty, with approximately 18 million classic car collectors and enthusiasts nationwide, you may be one of many Americans eager to hit the road in your own vintage vehicle. However, insuring a classic car is not as straightforward as adding it to a standard auto policy. Some insurance companies underestimate the value of collector cars or exclude necessary coverage.
With a multitude of classic vehicles and collector cars on the roads, securing the right insurance depends on how you utilize and safeguard your prized possession. Properly storing your vehicle, selecting a mileage plan that aligns with your driving habits, and avoiding unnecessary add-ons can help prevent overpaying for coverage. Making the wrong choices could result in either overspending or being inadequately covered in the event of an incident.
Before revving up your classic car for the upcoming warmer months, here is a guide on how to insure your vintage vehicle without breaking the bank.
How Classic Car Insurance Differs from Standard Policies:
Not all “old cars” qualify for classic car insurance, as insurers use various classifications:
– Classic car: Typically aged 10 to 24 years with historical significance
– Antique car: Generally over 25 years old with historical importance
– Collector car: Any rare or unique vehicle that appreciates in value over time
While standard auto insurance typically pays out based on actual cash value (ACV) considering depreciation, classic or collector car insurance often provides agreed value coverage. This means you and your insurer establish a predetermined payout amount upfront through an appraisal, photos, or market data. In the event of a total loss, you receive the agreed-upon sum, minus a deductible, rather than a depreciated value.
Classic Car Insurance Requirements:
To qualify for classic car insurance, you typically need to meet strict criteria, including:
– Restriction on daily driving; meant for pleasure drives and car shows, not regular commutes
– Secure storage requirement in an enclosed building, locked garage, or storage unit
– Ownership of another vehicle for daily driving, as classic car insurers do not cover primary vehicles
– Good driving record, as previous DUIs or traffic violations can impact eligibility
– Well-maintained vehicle, often requiring evidence of upkeep, restoration work, or appraisals
Failure to meet these requirements could lead to application denial or higher premiums.
How to Obtain the Right Coverage for Your Classic Car:
Tailoring your insurance to fit your classic car usage, whether it’s a ’67 Mustang Fastback, vintage Porsche 356, or Chevy Bel Air only driven on weekends, is crucial.
Essential Coverage Components:
– Agreed value coverage: A pre-determined value agreed upon with your insurer, ensuring a full insured amount in case of a total loss, after deductibles.
By understanding these distinctions and requirements, you can secure appropriate insurance for your classic car without overspending or being underinsured.
Comprehensive and collision coverage protect your car against damage from various incidents like accidents, theft, vandalism, fire, hail, or falling objects. Liability insurance is essential as it covers injuries and damages caused to others while driving, and is mandatory in most states. Additional coverage options include spare parts coverage for replacing lost or damaged parts, under construction coverage for ongoing restoration projects, and roadside assistance tailored for classic cars to prevent damage during transport.
When considering additional coverage, it’s important to assess your car usage to determine which extras are worth adding. For example, high-mileage coverage may not be necessary if your classic car is mainly parked or used for leisurely weekend drives. Similarly, a no-deductible plan may not be needed if you have sufficient funds in your emergency savings to cover a deductible expense.
Before investing in add-ons, ensure they align with your driving habits and needs rather than just increasing your premium costs unnecessarily. It’s also wise to explore how to build an emergency fund on any budget and find an insurer specializing in classic cars to tailor your coverage effectively.
When it comes to insuring your classic car, you can choose between a nationally recognized insurer or a specialty insurer. National insurers like State Farm, Allstate, Liberty Mutual, GEICO, and USAA offer classic car coverage options, while specialty insurers such as Hagerty and Grundy focus exclusively on collector cars, providing unique perks like agreed-value policies, spare parts coverage, and restoration protection.
Evaluate your needs and preferences to determine whether a national insurer that can bundle classic car coverage with your existing policy is suitable or if a specialty insurer offering tailored benefits and flexibility is a better fit for your classic car insurance needs.
American Collectors Insurance is an excellent choice for cars in the midst of restoration. They offer customizable mileage plans, inflation guard to adjust your insured value with market changes, and coverage for ongoing restorations, including tools and spare parts. When switching car insurers, consider these 5 steps to ensure you’re getting the best coverage at the right price. Comparing quotes for classic car insurance is essential, as rates vary based on factors like the type of vehicle, storage practices, and usage frequency. Pay attention to policy details such as agreed value vs. actual cash value payouts, mileage limits, storage requirements, and coverage for spare parts and special events. By conducting thorough research, you can find a policy that meets your needs without overspending. Explore ways to save on classic car insurance, such as limiting mileage, storing your vehicle securely, bundling policies, increasing deductibles, and inquiring about “lay up” coverage for vehicles in storage. Additionally, insuring multiple classic cars together or taking advantage of multivehicle discounts can help lower costs. Keep in mind these age-smart strategies for saving on car insurance, and consider other money-saving opportunities in our insurance series. If you have questions about insuring your classic car or want to learn more about saving money on coverage, check out our FAQs and personal finance guides for valuable insights.
Insuring a classic car as a daily driver can be challenging, as most classic car insurers do not provide coverage for daily use. Grundy is one exception, offering unlimited mileage for leisure drives. However, using your classic car for daily errands or commuting may void your policy. In such cases, a standard auto policy is usually required, potentially leading to loss of agreed-value coverage.
The cost of classic car insurance varies, typically being 30% to 50% cheaper than standard auto insurance. For example, Hagerty states that their classic car insurance is 27% cheaper than standard auto insurance, while Grundy reports a 50% reduction in premiums. Factors such as your vehicle’s value, mileage, storage, and driving record all influence the premium you pay.
When it comes to insuring sports or exotic cars, expect higher costs compared to standard car insurance policies. The actual expense depends largely on the specific make and model of the car. For instance, insuring a Dodge Charger with full coverage could amount to around $5,000 per year. Exotic or rare cars command even higher premiums due to their increased value, with only a few specialty insurers, like Hagerty Insurance, willing to provide coverage for them.
Sources:
– “The Collector Car Market: By the Numbers,” Hagerty. Accessed May 12, 2025.
About the writer:
Cassidy Horton is a finance writer specializing in banking, insurance, lending, and debt repayment. Her insights have been featured in reputable financial publications such as NerdWallet, Forbes, and MarketWatch. Cassidy’s passion for personal finance was ignited when she successfully paid off $18,000 in debt within 10 months of earning her MBA. Today, she is dedicated to empowering individuals to take control of their financial well-being.
Article edited by Kelly Suzan Waggoner. For feedback or suggestions on topics you’d like us to cover, please reach out to our team.
