A vintage car is like fine wine: It increases in value as it ages. If you own a classic four-wheeled beauty, you want to be certain you have enough insurance to protect it — and that requires specialized car insurance.

When a car is totaled, a standard car insurance policy cuts you a check for the car's actual cash value (ACV), which takes into account its depreciation.

Cars are worth less every year. Antique or classic cars, however, not only hold their value but also increase in value. So you need to find a car insurance policy that protects the full value of your car.

You want an insurance policy that offers "agreed value." That means you and your insurance company predetermine the dollar value of your vintage car and, in the event of a total loss, you will be paid that exact amount.

How do you determine the value of your car? You can hire an appraiser, but most classic car insurance companies don't think it's necessary. If you have a stock original vehicle (one to which you haven't done any work or added anything), there are many resource guides and pricing books, such as the Old Cars Price Guide or the NADA Guides that will give you an accurate estimate of your car's value. If you've made improvements or additions to the car that you believe increase its value, you need to hire an appraiser to support your claim.

If you have a newly restored vehicle or a street rod, the price guides are not helpful. According to Hagerty Classic Insurance, people restoring cars or building a street rod should keep detailed lists of the work performed and receipts for all parts and labor. "Some companies will require appraisals at the owner's expense to establish the agreed value, while others may not. . . . The best companies will not require appraisals and will rely on your opinion to help determine the proper insured value of your collector car," according to Hagerty's Web site.

If you buy a car insurance policy that outlines an automatic value appreciation, you won't have to review your policy as often. American Collectors Insurance, for example, offers what it calls "inflation guard," which automatically increases the vehicle's value by 2 percent each quarter, up to 8 percent each year, at no extra cost. If, however, your policy doesn't have automatic increases, you should review your policy and your car's value on an annual basis to be sure you have enough coverage.

Qualifications

Both you and your car will have to meet certain qualifications to buy classic car insurance. Perhaps most important of all is that you have a clean driving record. One or two minor violations may be allowed, but that's it.

You'll also have to show that all the drivers in your household have access to another vehicle for daily driving needs. For example, American Collectors Insurance requires its clients to "drive the insured vehicle on a 'pleasure only' basis." In fact, vintage car insurers will restrict the number of miles you can drive each year. According to Hagerty Insurance, 2,500 miles has long been considered the average annual usage, but a 5,000-mile option is often available.

In addition, many insurers will require the principal owner and driver to have a minimum of five years' driving experience. American Collectors and Classic Collectors require drivers to have at least 10 years of driving experience and Hagerty requires the insured to be at least 25 years old.

Most insurers will also require you to store your prized vehicle in a locked garage when it's not in use. Some companies may require a security system and even a sprinkler system. You also won't be allowed to use the car for things like racing or commercial-transport purposes.

While the standard used to be that a car had to be 25 years or older to be considered for vintage car insurance, the lines have blurred as car collecting has increased in popularity. A car 25 years or older is now considered a vintage car, but cars that are 15 years or older can be considered "modern classics" and still qualify, according to Classic Collectors Insurance. New but extremely rare cars may also qualify for this special coverage. You'll need to check with the insurer on a case-by-case basis to see if your car qualifies.

More bang for your buck

Classic car insurance is much less expensive than standard car insurance because of the restrictions. The liability portion of your vintage auto policy may cost less than $100 per year. That's because your insurer knows you won't be driving the car very much and, when you do, you'll be driving it very carefully.

The physical-damage portion of your policy (the part that covers theft, vandalism and fire losses) will run you a bit more: about 1 percent of the total value of the car. So if you have a classic car that's worth $100,000, you'll pay about $1,000 for comprehensive and collision coverage. Obviously, pricing will vary depending on the vehicle, where you live, how you garage your car and how often you drive it. For example, a 40-year-old California resident with a good driving record who owns a '67 Convertible Sting Ray (valued at $100,000) and plans to drive it under 2,500 miles a year could pay a roughly $1,500 per year, according to an online quote from Hagerty Insurance. At the same time, Hagerty advertises that its average premium for a '65 Ford Mustang is around $110 a year.

Some companies offer additional coverages specific to classic cars, such as "restoration coverage" which increases the value of the car while an active restoration project progresses, "auto show medical reimbursement" that pays out if you're injured at an auto show or other car function, and automatic coverage for new classic cars you add to your collection.