Classic Car Insurance Basics

Posted in Auto Insurance , Classic Car Insurance

August 17th, 2009

What if a trip to Vegas resulted in you winning a classic ’57 Chevy in a slot tournament? Elation, joy and disbelief may be some of your first emotions, but eventually logic would take over and you would have to ask yourself, “How the heck do insure this baby now?” Well the answer comes in the form of purchasing classic cars insurance, as these rare collectibles require special attention in their maintenance and their insurance coverage.

Most standard insurance companies are used to insuring common vehicles straight off the assembly line and the rate of replacement/coverage is based on the book value of the vehicle. However, it is a little more difficult with classic cars. For example, a ’57 Chevy in un-restored condition may only have a blue book value of a couple hundred dollars. However, in mint condition the vehicle may be valued at over $35,000. That is quite a difference.

Typically, classic car owners opt into insuring their vehicles with a type of “stated-amount coverage.” The car-owner must document the interior and exterior condition of the car with photographs and then get a written appraisal from a specialist. All that documentation must then be submitted to the insurance company in order to get the classic car insurance policy needed.

It is important to note that even though you may successfully insure your ’57 Chevy for it’s full $35,000 value, if your car is stolen or damaged, you may receive less back than you counted on. Currently, there is a major glitch in the classic car insurance business in that the payout amount of the vehicle is based on market trends. So if the car you insured for $35,000 has a current market value of $25,000 at the time of your claim, the latter is the maximum you will be paid. Unfortunately, the reverse is not true and the total payout amount of the vehicle is capped at the initial amount signed up for, even if the market value of the classic car increases.