The car you drive every day to and from work sees a lot more action than the immaculate 1950s Ford Thunderbird you carefully stow away in the garage. It’s also going to be a lot easier to find repair parts for your late-model sedan than it is for a classic ride that rolled off the assembly line decades ago.

Your automobiles may have very different roles, and they likely need different insurance policies to reflect that reality. When it comes to highly prized vehicles, a product called classic car insurance may be the better bet.

Because you likely drive your collectible car far less than your main set of wheels, you typically pay lower premiums than you would with a standard policy. But these niche policies have other benefits, too, like the ability to recoup the full value of the car in the event of a total loss, even if the value has appreciated. Should your vehicle need repairs, insurers that offer classic car coverage will usually have expertise that traditional companies simply don’t have. 

Other than those key differences, classic car insurance offers much the same protection you’d get with other policies, including collision, comprehensive, bodily injury liability, and property damage coverage.

Key Takeaways

• Classic car insurance tends to offer lower premiums than standard policies, largely because it’s intended for cars that are driven infrequently.

• Traditional auto policies factor in depreciation when determining the replacement value or “total loss” limit of a car; classic car policies are designed for vehicles that may actually appreciate over the years.

• Before obtaining a policy, check its restrictions—the insurer may place limits on how often you can use the car and whether you can transport it to exhibitions domestically or abroad.

What Is a Classic Car?

The word “classic” can be a subjective term when describing automobiles; an owner’s pride and joy might just look like an old car to someone else’s eye. Insurance carriers have their own criteria for what qualifies as a classic car, but in general it applies to models that are more valuable now than they were new.

Typically, they’re vehicles that are at least a couple of decades old, although newer models may qualify if, for example, they were made in smaller production runs or underwent significant modification.  

Examples of classic cars include:

  • Collectible cars that are at least 25 years old (this age varies by insurer)
  • Muscle cars and hotrods
  • Exotic vehicles
  • Newer ultra-luxury and high-performance cars

Fast Fact

Companies that specialize in classic car insurance include Hagerty, American Collectors Insurance, Grundy Insurance, and Heacock Classic.

Requirements to Obtain Insurance

Classic car insurance isn’t intended for cars that owners regularly use for their commute or trips around town. Some carriers will insure cars that are used for periodic leisure drives, although there may be a limit to how many miles you can put on the odometer. If you plan to transport the car to exhibitions of any kind, you’ll want to ask the company whether those trips will be covered under your policy.

In addition, companies generally won’t indemnify a high-value car that could be subject to weather events or vandalism. Most classic car policies have precise language about the type of environment in which you’re allowed to keep your ride. Usually, that’s a fully enclosed, locked area like a home garage or private storage unit.

When looking for an affordable policy, it also helps if you have a good driving record, since it coincides with a lower risk that the insurer will have to make a payout. Carriers may get skittish about extending coverage to a collectible car if the insured individual has multiple recent speeding tickets or shows a pattern of reckless driving. 

Shopping for a Policy

You have a fair amount of choice when it comes to a collectible car policy. Some companies offering this type of protection are niche insurers that specialize in rare cars, although major carriers like Allstate, GEICO, and Farmers also offer policies geared toward the collector. Here are the main factors you’ll want to look for when comparing carriers.

Agreed value

A staple of classic car insurance is that it’ll pay for the actual value of your car, which, unlike most production vehicles, may actually appreciate over time—this is called the agreed value, or guaranteed value. Make sure you and the company are actually in accord on the current market value so you don’t get taken for a ride should you need to file a claim. You will also want to make sure they’ll agree to increase your coverage limits should the car continue to appreciate over time.  

Mileage restrictions

One of the reasons that these specialty policies tend to be less expensive than traditional insurance is that they’re not intended for vehicles that see a lot of road time. Inquire what, if any, restrictions the company places on the number of miles you can put on the vehicle. You’ll also want to find out if they cover visits to club events and other shows. If not, you may be able to customize your policy—in other words, pay more—to include that coverage. 

Repair shop of choice

When you’re dealing with a coveted hotrod or a limited-production sports car, your local body shop may not have the know-how or access to proper parts to ensure a high-quality repair. Do a little research to make sure the carrier will fully cover repairs at the shop of your choosing.

In-house expertise

A good collectible car insurer serves as a concierge of sorts should your vehicle encounter a collision or suffer other damage. If high-touch service is something you value, make sure you’re comfortable with the expertise of the team that will be responding to your claim. 

The Bottom Line

If your garage houses a rare or highly collectible car that’s steadily going up in value, a traditional car insurance policy probably doesn’t make much sense. Classic car insurance policies often let you visit your preferred repair shop when work needs to be done and will cover the actual market value of your vehicle. And because they’re tailored toward vehicles that are meant for show more than utility, you often pay a lower premium, to boot.