Published: March 2016
Q: I'm buying a classic 1950s convertible that's in mint condition. Do I need specialty insurance?
A: “Yes, your best bet is insurance that’s specifically designed for classic cars,” says Lezlee Liljenberg, an Allstate agency owner in Arlington, Texas.
Why? Classic car insurance may offer a more generous reimbursement value in case your car is damaged. At the same time, this type of insurance policy may include restrictions and specifications that typically aren't required in standard car insurance policies, Liljenberg notes.
First, it may help to understand the distinction between a "classic" car and a "collectible" car. (Specialized insurance policies may be available to cover either.)
Liljenberg grew up with a dad who restored old cars — from Model Ts to Mustangs — so she’s very familiar with the classic car world. Generally, good-condition cars from the 1970s or earlier may be considered “classic,” cars, she says. “Even some '80s cars, believe it or not, may now be valued by insurance companies as ‘classics.’”
By contrast, a “collectible” car may be prized more for its unique appeal or features worth preserving. In other words, a collectible car isn’t necessarily classified by its model year.
Agreed value. A big difference between a classic car and a regular vehicle is the insurance value of the vehicle, Liljenberg explains. If a fully restored 1960s roadster is in an accident or stolen, an insurance appraiser can’t easily pull estimates of comparable cars from a website and give you a fair value of the vehicle or the necessary repairs, she notes. “If you insured a classic car under a standard personal auto policy and something happened to it, the value of the car might only end up being a few hundred dollars because it’s so old and has depreciated so much,” Liljenberg says.
A classic car insurer works with the vehicle’s owner to assign the vehicle an "agreed value." That number may take into consideration condition, improvements, cost of replacement and special-order parts and more.
"It’s usually a much higher valuation than a traditional auto insurer would give the car based simply on age and mileage,” Liljenberg says.
Usage restrictions. “The more your classic car is on the road, the more chance there is of it being in an expensive accident,” Liljenberg explains.
Some classic car policies may include mileage limits or offer coverage only for certain types of driving like pleasure usage. So, you may not be able to use the vehicle for daily commuting.
If you’re considering buying a classic car policy, check with your insurer on the specific restrictions outlined in the policy.
Safe storage. Making sure your vehicle is protected in adequate storage conditions is recommended and even required by some classic car insurers.
Vehicle condition. If you’re restoring a “project car,” you may be able to add an endorsement to your classic car policy to help protect it. For more information about classic car insurance, contact a local agent.