Collector Car Insurance : The Basics
You finally found the car you've wanted your whole life. So now what? The next step is to protect your investment. There are a lot of choices out there, but a basic auto policy may fall short for your collector car needs. This article offers the basics on collector car insurance and provides guidance in selecting proper coverage for your collector, as well as an appropriate provider.
Standard insurance annual premiums can cost a great deal more than those offered by a specialty program provider who better understands the nature and purpose of a collectible vehicle. Although standard companies can provide adequate coverage for a daily driver, they rarely offer the added benefits associated with collector car programs. In most cases, you'll pay a significantly higher annual premium with standard insurance, and the coverage will be inferior. Additionally, you'll probably pay fees for liability coverage on each vehicle, whereas a specialty policy may only charge a single liability fee for your entire collection.
Fewer than half of the collector vehicles on the road today are insured by specialty programs. Although collector car insurance has been available for five decades, most owners of collectibles, specialty cars and street rods are still insuring them through a standard insurance company despite the higher cost and often more restrictive policies. When your collector is driven only occasionally for pleasure drives, club events, special excursions, perhaps 1,000 or under 5,000 miles a year and not used for transporting passengers or for business, it's time to enroll those cars in a "collector car" specialty insurance program. The basic premise of collector car insurance is that you have a daily vehicle that's insured elsewhere, and many collector-car programs will require you to have at least one other car in your name for everyday use. There are several specialty insurance providers available to suit your needs and usually, it's cheaper to insure a classic/collector car than it is to cover a new vehicle.
Insurance companies will use one of three different policy forms. These are:
Collectors should consider the types of restrictions that accompany a specialty policy and find one with flexible usage guidelines that best suits their overall needs. While many specialty programs strictly limit owners to driving their collector vehicles to 2,500 miles per year, some providers offer more flexible usage guidelines. For instance, if the insured has a daily driver in addition to his/her collector vehicle, the mileage on the collectible vehicle may not be strictly limited - assuming it's driven on a limited basis consistent with owning a collector. Something else to keep in mind is that most specialty insurance programs don't allow vehicles to be used for the commercial transportation of goods or passengers, racing or daily transportation.
While the popular standard used to be 25 years and older for vehicles covered, it's always best to inquire on a per-vehicle basis. There are new cars that are insurable as collector cars — including kit cars, replicas and modern classics.
An auto insurance policy is made up of different coverage and, while the exact requirements vary from state to state, these descriptions explain the basic types offered.
As insurance is regulated on a state-by-state basis, premium computations vary slightly throughout the country. Anyone insuring a collectible vehicle should research all of the options available before making a final decision. Rates are a consideration, but should not be the determining factor. When buying insurance, it's vital to remember you are buying service. First look for quality customer service, excellent claims handling and a knowledgeable staff that understands collector vehicles. For example, a specialist insurer knows why the windshield of your '56 Corvette costs $3,000 - and knows where to get one - as opposed to a standard insurance agency, who figures the same 'shield should only cost $500 and, unfortunately, will only pay up to that amount. Also take into consideration whether the insurance company is skilled at servicing collector car claims. "A collector car program should have dedicated claims adjustors who know collector cars,'' says an insurance executive . "It's not in the total loss; it's in the partial loss. It's where the better programs shine.'' First and foremost, your policy should be underwritten by an insurance company certified to doing business by your state insurance department. Furthermore, the auto policy should be written using policy forms approved by your state insurance department.
- Kristen Kazarian