Newcomers to the collectibles market should be
careful to research the best way to insure their vintage vehicles
before they hit the road, according to the Insurance Information
Institute (I.I.I.).
Antique and classic cars, defined as those built
30-plus years ago, have special needs that differ from traditional
vehicles. Regular-use cars are on the road every day but antique and
classic cars are typically used for limited pleasure driving, car shows
and club events.
"Whether it's a 1932 Alfa Romeo or a 1962 Ferrari, antique and classic car owners should purchase auto insurance coverage
for their collectible separate and apart from the policy that covers
their regular-use vehicle," said Michael Barry, vice president, Media
Relations at the I.I.I. "While regular-use vehicles depreciate in value
over the years, many classic cars appreciate in value and have to be
insured accordingly."
As with a typical regular-use auto insurance policy,
an antique or classic car policy generally includes the following basic
coverages: liability (bodily injury and property damage); collision;
comprehensive; uninsured and underinsured motorist coverage; and
medical payments or personal injury protection. Collision and
comprehensive coverage are optional in most states.
Antique or classic car owners ought to pay special attention to the following issues when purchasing insurance.
- Vehicle usage: Most collectible
cars are rarely on the road. The annual mileage for these vehicles
usually ranges from 1,000 to 5,000 miles, and the policy should reflect
that limited use.
- Vehicle storage: Antique and
classic car insurers traditionally insist that these types of cars be
stored in a fully enclosed, locked garage when not in use.
- Vehicle valuation: "Agreed-value"
policies are preferable to "stated-value" policies. Agreed-value
policies guarantee that, in the event of a total loss, the insurer will
pay the owner of the car the full amount listed on the policy, minus
any deductible. Stated-value policies, while rarely sold, are often
open to interpretation about the value of the vehicle in the event of a
claim.
- Vehicle condition: Insurers
prefer to insure cars that are in excellent condition, and antique and
classic car insurers may decline to cover cars that appear to be
weathered or that have sustained prior damage. Insurance coverage can
usually be obtained, however, while an antique or classic car is
undergoing an active restoration.
Some insurers of collectible vehicles may want to
know whether spare parts are available in the event that the car is
damaged, and whether there are auto body shops equipped to fix older
vehicles in the vicinity of the owner's residence.
However, most insurers specializing in antique and
classic cars have an extensive network of resources that can help
owners obtain rare and hard-to-find parts. Moreover, some insurers will
occasionally allow a policyholder to ship an antique or classic vehicle
across state lines for repair at a shop with expertise in a particular
car.
"This type of specialty insurance is very sensitive
to market forces from both the insurance industry and the collector car
market," said Barry. "Reviewing your policy annually will help you
understand your car's potential worth and the type of coverage you
need."
