The Difference Between Standard and Specialty Classic Auto Insurance

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Most classic car owners are unaware of the monetary and coverage benefits they can obtain by choosing a specialty classic auto insurance plan over a standard plan. Even though the monetary value of a classic vehicle (any vehicle over 25 years old) differs drastically from that of a standard vehicle, less than half of collector vehicles on the road are insured by specialty policies.

Believe it or not, standard insurance policies are often around 500 percent more expensive than classic auto policies. In addition, classic auto policies have enhanced plan options tailored to the unique needs of classic vehicle owners.

For instance, most classic owners would feel foolish driving their classic to and from work. Instead, they only take it out of the garage for special occasions, parades and auto shows. Almost all classic auto plans acknowledge that less time on the road means a lower collision risk and reflect that lower risk in their policies. These plans include a waiver that keeps your costs low as long as your vehicle stays below a certain number of miles per year.

The Difference in Auto Value With Specialized and Traditional Insurance

To illustrate the difference in how a specialized classic auto insurance policy values your vehicle compared to a standard policy, let’s look at a hypothetical scenario.

Imagine you purchased your vehicle in 1977, the year the first “Star Wars” film was released on the big screen. At this time, you paid $2,000 for your vehicle brand new.

Now imagine it’s not 1977 anymore, it’s 2020 (and a total of 20 “Star Wars” films have now been released). Your car sells for $20,000 off the lot. One day, you total your vehicle and have to call your insurance company. Do you think they’ll give you the $20,000 value of the car or the original $2,000 you paid in 1977?

With a standard insurance plan, you’d be lucky to get your full $2,000 back.

However, with a specialized classic auto plan, your insurance company will get you the current going price of your vehicle in addition to the value of any upgrades or restorations you’ve made.

Additionally, most standard insurers only will insure your vehicle at a static rate—the coverage price is set once and never adjusted. This isn’t ideal for classic auto owners, who often are continuously restoring their vehicles to a more historically accurate condition (and raising the value significantly in the process).

Thankfully, classic auto policies often include the option to adjust your coverage when your vehicle changes in value, meaning you don’t need to lose your alterations in the event of an accident.

Actual Cash Value, Stated Value and Agreed Value

When hunting for any type of auto insurance, you should understand the difference between the three forms of value estimation: actual cash value, stated value and agreed value. Depending on the form the company uses, the deal you’re getting may or may not be the right fit for your classic vehicle’s particular needs.

Actual Cash Value: Most everyday drivers have an insurance policy based on actual cash value. This is the most common form of standard car insurance. According to the plan, your vehicle will be replaced equal to the replacement cost minus depreciation of the vehicle.

Stated Value: Policies that use stated value take you at your word. You simply tell the insurance company how much the car is worth, and that’s what your policy covers. If this sounds too good to be true, that’s because there is a catch — because the insurance company has no guarantee beyond your word of the vehicle’s actual value, premiums are generally high and deductibles are around $1,000 or more.

Agreed Value: Agreed value is the most common type of collector and classic auto insurance policy and the one recommended by most auto collectors. With agreed value policies, you work with your agent to decide on the value of the car together using official documentation and other resources. Typically agreed value deals have low or no deductibles.

Who Is Eligible for Classic Auto Insurance?

Because of the high-value nature of classic automobiles, specialty insurance policies often have stricter requirements than standard auto insurance policies. Below are some examples of common stipulations you may come across in your hunt for insurance:

  • You will need a clean driving record.
  • You must have 10-plus years’ driving experience.
  • No teen drivers or drivers with poor records will be allowed on the policy.
  • The vehicle must be kept in a storage facility or garage to be protected from the weather.
  • You must prove you own another vehicle for daily transportation.
  • You must provide proof that the car will have limited mileage.

Collector and Classic Car Insurance for Less

Keep your collector vehicle safe from harm, and make sure you get the strongest coverage on the market for the best value. Let Classic Auto Insurance customize a policy to fit your needs.

We offer affordable, Agreed Value coverage for a variety of collector, classic and custom vehicles. Our friendly, knowledgeable staff can answer your questions and give you a quote on the spot. Call (888) 901-1338 or get an instant quote online.