This article was published by American Collectors Insurance. The original article can be found here.
The differences between classic or antique car insurance and traditional auto policies are distinct, salient, and important. Though they may seem subtle or generalized at first, being familiar with these differences can make or break a collector’s investment in the event of a loss.
Here at American Collector’s Insurance, we are well-versed in the inadequacies of traditional auto policies as they pertain to classic or antique automobile protection. The list below is a compilation of the most important distinctions between the two that you need to know about if you are a classic car collector.
- Agreed Value vs Actual Cash Value Claim Settlement: The settlement value on a total loss claim is established in the policy. A collector car policy generally uses Agreed Value provision (where you and the insurance company agree on the collector car value before the policy starts). A regular auto policy generally uses Actual Cash Value provision, where the total loss settlement value is established after the loss occurs. Agreed value provides the additional peace of mind of not having to be unpleasantly surprised at the value your claim adjuster calculates on your classic car.
- Vehicle Eligibility: When identifying a collectible automobile, classic car insurance companies typically requires the vehicle be no less than 15 years old, with some mandating an age of at least 25 years. However, cars are collected for several reasons, whether they are limited editions or specialty vehicles. A collector’s insurance policy takes this, and many other relevant factors into consideration that traditional auto insurance companies do not. Many insurers do not insure vehicles older than 25 years old on a regular auto policy.
- Restoration Improvements : Many collector car owners have made substantial investments to personalize, preserve, restore, and improve their car so that it is different (and more drivable) than when it left the factory. In general, unless vehicle upgrades were previously disclosed and endorsed onto a regular auto policy, most regular auto insurers limit their claim repair scope and the value of their settlement offer for “total loss claims” based on the original equipment that was installed on the vehicle. You may be surprised at the settlement offer you receive on a nicely restored classic car after a total loss claim. Improvements include but are not limited to:
- Drivability improvements: e.g., upgraded suspension, installation of power steering,
- Performance improvements: e.g., upgraded engine, transmission upgrade,
- Safety Features: e.g., upgraded disc brakes, LED lighting upgrades,
- Comfort improvements: e.g., installation of air conditioning, upgraded interior finishes, and/or
- Visual improvements: e.g., special non-factory paint colors, additional customizations,
- Claim Settlement Value: Because claim adjusters for a regular auto policy estimate repairs based on factory installed equipment/standards, the claim settlement amount you are offered on a stolen or totaled collector automobile may be much less than what you’ve invested in restoring your vehicle. With collectors insurance policies, your classic vehicle is insured for an Agreed Value policy limit, determined by you and the collector’s insurance company before the loss occurs.
- Repair Shop of Choice: Not every mechanic/shop has the knowledge, credibility, or skillset to repair someone’s damaged collector car. American Collector Insurance allows customers to select their preferred repair shop and our specialized classic car adjusters thoroughly review the estimates to ensure that they are appropriate and reasonable.
- Optional Coverages Available: Collector Car policies offer flexible optional coverages tailored for classic cars, including reimbursement plans for: Towing, Labor, Roadside Assistance, Car Show Expense, Emergency Travel Expenses, Emergency Evacuation Expense coverage. We’ve developed numerous endorsements especially relevant / meaningful for owners of older classic/collector cars.
- Significant Premium Savings (vs Traditional Auto Insurance): Classic car insurance are tailored to collector vehicles (i.e., vehicles are not daily-drivers), stored appropriately, and cared for very gingerly (“babied”). Therefore, collector car insurers like American Collectors Insurance can underwrite and service policies accurately, while at the same time charging up to 40% less than regular auto insurers do on the same vehicle. Collector car insurance offers you a choice of mileage plans to allow you to tailor your policy to reflect your vehicle usage. Because you don’t drive your collector car as frequently, your cost of coverage should be significantly less.
- Low Deductible Options: Collector car insurers typically have much lower deductible options available for your classic car policy (e.g., $0, $100, or $250) than are typically available from regular auto insurance companies. So, if your classic car is involved in an accident, your out-of-pocket cost may be substantially less.
If you own collectible or antique automobiles, you need to have them properly protected. Give us a call today or browse some of the other pages on our website to learn more about what our policy options can do to protect your investment.