Many people invest a lot of money in rebuilding and reinstating old cars to their original condition. Such an undertaking requires massive amounts of money, so it is only rational that owners want to insure their investment against losses. Classic cars are a category of old cars (mostly ten to twenty years old) that are considered to be more valuable than similar cars of their age due to various factors. This means that not every old car will pass for a classic car unless it meets those conditions.
What is Classic Car Insurance?
Classic car owners looking to insure their vehicle have to take up classic car insurance instead of normal comprehensive or collision insurance. This is because the value of regular cars usually depreciates with age while that of classic cars increases. This calls for a different insurance plan. Classic car insurance is usually provided by specialized insurance companies, as well as larger companies in the industry. Before a vehicle qualifies for classic car insurance, it is vital that it satisfies a list of conditions set by the insurer.
How It Works
Classic car insurance does not rely on depreciated value as normal car insurance does; policies are based on an agreed value between the owner and the insurer, instead. The main consideration to keep in mind is that classic car insurance pays the owner the full value of the car in case of damage or loss. For instance, an owner of a classic car valued at $50,000 will be paid the full amount and not a depreciated amount in the event of a loss. This ensures that owners recover the full amount of their investment.
What to Consider
Insurance companies offering classic car insurance policies have a list of conditions that owners must adhere to before they qualify for the policy. First, the vehicle in question must satisfy the company’s requirements for a classic car. These include age and worth. The agreed value of the vehicle is usually set by the owner, insurer, and an assessor, all working together.
Due to the high value of classic cars, it is important that the investment remains protected as much as possible. Insurance companies usually require that the vehicle is kept in a protected storage space such as an enclosed garage. Additionally, insurers cap the distance the vehicle can drive; the vehicle can only be used for leisure driving, so owners must have a primary vehicle for daily use. Some insurers may even require owners to transport the vehicle in an enclosed container when taking it to shows and exhibitions.