Most of us who own collector cars have been using classic car insurance for over 15 years. It's inexpensive and very easy to get as long as certain agreements exist between the companies and the owners. Those agreements usually include storage of the vehicles in locked garages, ownership of other (everyday) vehicles and limited use of the collector cars - sometimes with a yearly mileage cap. The resultant reduced risk to the insurer allows for the low rates.
All that is fine, but no insurance company can spell out specifics of coverage other than in general terms without creating a lengthy book of rules on how you can operate your collector car. Since no two people drive their cars in the same way, same geographic areas, same days of the week, etc., the insurance companies have to handle claims on an individual case basis. That leaves many owners in doubt about their coverage in certain instances, sometimes making them hesitate to drive their cars.
In order to help get to the nitty-gritty of coverage we came up with a "real-world" set of situations wherein coverage might be in doubt. These are taken from actual stories we've heard from owners, by the way. The situations were presented to a number of the major collector car insurers and their responses were synopsized. Since the purpose of this article is one of clarification and not one of comparison, we've omitted the names of the companies. Most of you know who they are...
Questions And "Typical" Replies:
Do you pay out the agreed-upon value of the car even though it is aging?
Yes. Your policy is an "agreed value" contract that guarantees the insured they will receive full reimbursement of insured value in the event of a total loss.
What is your maximum allowable yearly mileage for the insured vehicle?
Some companies want you to limit use to less than 2500 miles per year, but most are quite flexible. Vehicles insured must be used on a limited basis consistent with the operation of something valuable, such as club functions, exhibitions, meets, tours and limited pleasure driving.
To what extent can I modify my car? (Engine, Body, etc.)
Most Street Rod, Custom and Muscle car modifications are acceptable. The only major concern is that the vehicle be kept in a safe operational configuration. Racing is a no-no that requires separate insurance coverage.
Can I insure a vehicle under restoration? If so, how is value calculated?
Yes. Value is based on the vehicle's current market value, taking into consideration the amount spent on materials and labor to date.
Do you require periodic safety inspections? Some states do not require them for vehicles licensed under "antique" status.
There are no additional safety inspection requirements other than those specified by the states.
Under which of the following scenarios would you NOT pay out for a stolen or severely damaged vehicle?
1. I parked the car in the lot of an upper-scale restaurant in the suburbs on the way back from a weekend car show. The loss occurred while I was in the restaurant.
2. I parked in the lot of a chain restaurant on a weekday evening, during which the loss occurred.
3. I parked the car in the lot of a B&B in a small town during a driving tour with members of the local club. The loss occurred there.
4. I parked the car in the hotel garage in a city our club driving tour was visiting.
5. The car was hit while I was driving it on a Sunday afternoon.
6. The car was hit while I was testing repairs on a weekday afternoon.
7. The car caught fire and was totaled while I was making repairs to the fuel system.
8. The car's electrical system shorted out and the fire destroyed the car.
9. The car was vandalized while being shown at a car show. I wasn't on hand at the time.
10. A tree fell and crushed my garage, severely damaging my insured vehicles.
11. I drove the car to my office during the week and parked it in the garage. It was sideswiped by some other vehicle but there were no witnesses.
12. I loaned the car to a friend for a school reunion. It was damaged in the parking area.
Believe it or not, the companies responded that they would most likely cover the loss in every one of the scenarios listed above. However, specific circumstances surrounding the loss might alter their decisions in those cases where the car was clearly not being used for "pleasure" driving. If you're planning to use the car for any other purposes be sure to consult the company.
When purchasing insurance for your antique or classic car, these are the kinds of questions you need to ask your insurance agent. Also read the policy carefully for any exclusions or other rules that may apply. Enjoy driving your classic. As long as any damage or loss occurs in any reasonable set of circumstances the insurance company usually will pay out. By the way, it wouldn't hurt to take yearly photos of your car and keep them on file. That way there won't be any arguments as to its overall condition in the event of a claim.