This month's Eastern Insurance Guest Blogger is Kristen Mitchell, a Personal Lines Customer Service Team Lead, who is happy to share her advice about choosing classic car insurance.
Owning an antique or classic vehicle is a significant investment of your time and money, but insuring it certainly doesn’t have to be. Whether you’re making your first antique purchase, or you’re a classic collector, it is essential to understand the components of classic car insurance, and how it differs from a traditional auto policy.
Do my car and I qualify for classic car coverage?
An antique or classic car is generally defined as being 25 years or older, and not the primary driving vehicle of the owner. The owner must have a safe, secure structure for vehicle storage, a valid driver’s license, a driving record free of major offenses in the past three years, and a properly-insured vehicle used for daily driving in their name.
You can determine if it qualifies for classic car insurance by considering how you will use your vehicle, such as:
- Will you only drive the vehicle to car shows or in a few parades? If so, your policy should be limited to those circumstances.
- Are you going to use your antique vehicle to go to the grocery store, hit the beach or visit a relative? Then your policy should reflect this kind of use.
How is a classic car insurance policy different than my traditional auto insurance policy?
While your first thought may be to add a newly purchased collector’s vehicle to your current auto policy, we wouldn’t recommend it. Here’s why:
- Appreciation vs. Depreciation
You’ve likely heard, “A new car loses value as soon as you drive it off the lot.” In both the resale market and insurance, that’s true. A typical vehicle begins depreciating or losing value, as soon as you acquire it and continues losing value as time goes on, whereas a classic vehicle that is well maintained will increase in value over time. If your classic vehicle was totaled in an accident while insured on a standard auto policy, the amount of money you would receive would likely be significantly less than your initial investment based on this concept, as it would be depreciated based on age.
- Agreed Value Replacement vs. Actual Cash Value
In a standard auto policy, if a vehicle is totaled in an accident, the insured would receive “Actual Cash Value” for the car, which is defined as Replacement Cost minus depreciation as determined by the vehicle model, age, mileage, and condition. When you purchase a classic car insurance policy, we will collaborate with the company to come to a mutually agreeable amount for the Agreed Value Replacement, or the amount of money you would receive if the vehicle was totaled in an accident. This both eliminates surprises in the event of a large claim and protects your investment.
- Lower Premiums
Classic car insurance policies offer premiums averaging 40% lower than a standard auto insurance policy, providing you with better protection for your investment at a lower cost.
- Mileage Restrictions
In a standard auto policy, there are usually no restrictions on the number of miles you drive in a given year, though there are low-mileage discounts available. With a classic car policy, the opposite is usually true, though there are varying levels of flexibility. Will you be primarily towing your pristine antique vehicle to car shows, or would you occasionally like to cruise to the beach in your classic car? There are options for a variety of uses, but know in advance that you will not be able to use this vehicle for daily driving if you choose to insure it on a classic car insurance policy.
What else can a classic car insurance policy offer me?
A classic car insurance policy provides a number of additional benefits specifically tailored to the collector and their unique vehicle. Some common program highlights include:
Emergency flatbed towing in case of a breakdown
Roadside assistance for items such as a flat tire, dead battery or running out of gas
Emergency lockout assistance
Lost key return
Emergency travel expenses in case your classic vehicle breaks down while away from home
Car show expenses associated with missing a car show due to a breakdown
Reimbursement for personal items that are vandalized or stolen from the vehicle
Each carrier can be different, but that is what Eastern Insurance Group LLC is here for: to help you make the right decision for your insurance needs. Live in the past while protecting your vehicle for the future!
Coverage options vary by carrier, but the professionals at Eastern Insurance are here to help you make the right decision for your insurance needs. To learn more about insuring your antique vehicle, or about any of our other personal lines products, contact one of our personal lines account managers by requesting a quote online, calling 800-333-7234 (Option 2), or by emailing us at firstname.lastname@example.org. We look forward to helping you soon.