It’s that time of year when classic car owners are bringing their antique beauties back on the road. Whether you’ve just finished restoring it, take it to car shows, or drive it for regular usage, you’ll want to find the best classic car coverage to protect your investment.
The first questions is whether to insure your collectible car with regular use on your auto policy, or with classic car insurance. Classic car insurance, also known as collector car insurance or antique car insurance, is often cheaper than an ordinate auto policy. This is because your prized possession generally spends less time on the road. However, it typically comes with limits like mileage restrictions, and may also restrict usage to pleasure rides only.
Another factor to consider is how much your policy will pay out if you have an accident and your car is a total loss.
Hagerty Insurance outlines the difference between stated value and guaranteed value. Let’s start with Actual Cash Value. Most cars begin depreciating the moment they’re driven off the lot. Therefore standard insurance companies insure your cars accordingly. They’ll adjust your payout based on what the vehicle would be worth the day of the accident (prior to damage), instead of what you originally paid. This is referred to as a vehicle’s Actual Cash Value.
Stated Value is coverage that reflects an amount that is “stated” at the onset of the policy. Essentially, you tell your insurer what your car is worth and it is insured for that amount.
Alternatively, Agreed Value is based on the proven value of your car as determined you and the insurance company, according to appraisals and photos. With Agreed Value, the insurance company will guarantee that they will pay this agreed-upon value in the event of a total loss.
If your classic or collector car is maintaining or increasing in value, Agreed Value is the best option to consider. Otherwise, you could risk losing out significantly if you have an accident.
If there’s anything you should know about insurance for your collector car, this is at the top of the list. Ask your insurance agent what kind of coverage you have. At Ferri Dawson Insurance Group, we’d be glad to help ensure your vehicle is covered.