Is Classic Car Insurance Cheaper Than Regular Auto Insurance? | American Collectors Insurance (2024)

It seems like it should be a simple enough question to answer: Is classic car insurance affordable? More specifically: is it cheaper to insure your classic car with an insurer that specializes in classic car coverage? The answer is usually yes —but why? Knowing the answers can help you determine if a classic car specialist insurer is right for you.

In many ways, classic car insurance works the same way as regular auto insurance. Depending on your needs and the mandated requirements of your state, you will be purchasing some combination of liability insurance which includes Bodily Injury, Personal Injury Protection or Medical Payments, and uninsured/underinsured motorist coverage. In addition, there’s also comprehensive and collision coverage. Chances are you have some experience with these types of coverage on your everyday vehicles.

So, what makes classic car insurance different, and possibly less expensive? It’s all about risk and usage. With most classic and collector cars, the risk to the insurance company is lower, so the rate is correspondingly lower. As a general rule, classic car owners tend to be much more careful with their cherished classics than they would be with an everyday vehicle. They’re also not as likely to drive them in bad weather, in heavy traffic, and in stressful situations.

When was the last time you saw a Packard or Bel Air in an airport parking lot?

There are exceptions to the rule, of course. If you have a decade-old economy car as your daily driver and a mint Gullwing 300SL classic in your garage, that premium gap between your everyday and classic car insurance rates could narrow, or even reverse. In that case, however, you’ll probably want the very best classic car insurance you can get – and there are reasons to choose a classic car insurer even in those cases when the rates are higher.

Why Choose Classic Car Insurance?

There are a lot of great everyday auto insurance companies out there, and they have the business of insuring your daily driver down to a science. In most cases, that means getting your car back on the road as quickly as possible after an incident, and not being too sentimental about it. Most of them also look at classic and collector cars as nothing more than “used cars.” Because of this, when it comes to a total loss, they will take the same approach to your collector car when calculating your settlement.

They will look at the current market value of your car, depreciate for mileage and age and come up with number that has no regard for what you have invested into your “Baby”. This method is known in the industry as “Actual Cash Value” (ACV), which is just fine for a car you leave outside in the winter but won’t thrill you when it’s applied to your garage kept classic Mustang. For that beauty, you’ll probably be more interested in the “Agreed Value” basis, where the owner and the insurer agree on the value of your classic car. If there is a “total loss,” the Agreed Value is the amount the you will receive less any deductible.

Here’s why that is particularly important. As vehicles age, fewer and fewer of them appear in normal dealer and sales channels, and the examples that do appear are often subpar. The difference between your 50-year-old Mustang and the last 50-year-old Mustang to be purchased by a used car dealer at an open air auction could be substantial – but to an everyday auto insurer, there’s no difference at all.

If you’ve made a substantial investment in restoring and upgrading your classic car, it can be even more important to find an insurer who understands the value of that work. That’s where choosing Agreed Value coverage and working with classic car specialists can really pay off.

So, How Is Classic Car Insurance Better Than Regular Auto Insurance?

It seems hard to believe that classic-car insurers can provide you with a better coverage and lower cost of premiums. What’s the catch? Usually, it’s just this: you’ll be expected to meet certain conditions. In most cases, the insurer will want you to have dedicated indoor storage for the classic car in question. You will need to demonstrate ownership of a daily-driven vehiclewith the appropriate insurance policy for that vehicle. Your collector car would be expected to be driven on a limited basis consistent with the hobby. As such, many classic car policies have mileage limitations, although mileage tiers can be increased for those who put on more hobby related miles than the typical collector.

Not every car will qualify for classic car coverage; your two-year-old compact SUV or minivan might have to wait a few decades before it’s considered a classic or collector’s vehicle. (Which isn’t to say it won’t eventually happen – nearly every 1957 Chevrolet sold was originally someone’s daily driver!) Your estimated value for the car will have to be supported by the condition and market value of the car in question. This is why it’s important that you talk to a company that understands how they’ll be covered if something happens.

You’ll need to meet a few standards, as well. If you have a teenaged driver in the house, or if your driving record has a few rough spots in it, that can affect your eligibility for the program, or at least require some additional discussion before a policy can be issued. If you want to go vintage racing, you’ll want to look at a policy that specifically includes that activity.

When all is said and done, however, there are several great reasons to specifically choose a classic car specialist to insure your classic or collector automobile. You’ll be dealing with people who understand why your vehicle means so much to you. You’ll have a team of qualified specialists to make it right if the worst happens. And you’ll probably save a few bucks along the way. What are you waiting for?