What you need to know when seeking insurance for your classic car

Paul Lines By Paul Lines, 1st Nov 2010 | Follow this author | RSS Feed | Short URL http://nut.bz/esgzyfhr/
Posted in Wikinut>Guides>Transport>Cars

Because of the very nature of the automobile is will be apparent that the insuring of a classic car is an area of its costs that requires careful consideration and, indeed, a considerable amount of research, particularly in deciding which insurance company would be the most appropriate and, more importantly, making sure you understand all the terms and conditions.

Introduction

The classic car, for most of their owners, is amongst not only their most prized possessions but also an automobile in which they have invested a great deal of time, effort and money, particularly in terms of restoring it to the original specifications and glory. Making sure the classic car is properly insured is therefore one of the most important actions needed to be taken from the moment it is purchased. However, it is equally important to ensure that the content of the insurance, and indeed the conditions and requirements of the company through which it is insured, will adequately match the requirement of the classic car owner.

By their very definition, classic cars are special vehicles. Because of the age of the vehicle, usually classified in the UK as being in excess of twenty five years, they are more expensive to repair than a vehicle in everyday use. Additionally, most will have a value that is cannot be judged by normal automobile standards. For example, a well kept and restored classic car is more likely to appreciate than depreciate in value. These factors add to the importance of ensuring that the right insurance policy is used to cover them against risk of damage, theft or loss.

Choosing the insurer

Although standard auto insurance companies will offer you rates for these vehicles it has to be borne in mind that this type of car is not one in which they would have a great deal of expertise, or indeed sufficient data and understanding about the model to be able to offer the best risk judgement on. It follows therefore that insuring your classic car with mainstream insurance may not only result in an expensive premium but also provide you with insufficient cover to meet your needs.

However, over recent years there have evolved a number of specialist insurance products designed for the classic car market. The underwriters for these insurances have the level of expertise that you require to ensure that your investment in the classic car is appropriately protected within the policy provided and this is therefore certainly an issue to be considered first when seeking classic car insurance.

Terms and conditions

As is to be expected, due to the uniqueness and value of the classic vehicle, there will be certain conditions attached to these specialist policies, especially if the owner wishes to achieve a reasonable premium. Two of the most important elements that will need to be considered are security and usage. In terms of the former it is likely that most insurers of classic cars will offer far better rates for vehicles that are normally kept in a secure garage rather that left out in the open. In addition to making sense from a theft and risk viewpoint there is also the fact that garaging a classic car helps to protect it from the elements.
With regard to usage, with virtually all classic car insurance the premium rates will be conditional upon mileage. Classic cars are not everyday transport and an insurer would not expect them to be used as such. Therefore, it is likely that the insurance policy will stipulate a limit on the number of miles covered by the vehicle each year. In the UK, this is usually between 3,000 and 5,000.

Another condition that needs to be borne in mind is that classic car insurance is based upon private use. If the owners' intention is to use the vehicle for commercial purposes, as might be the case for weddings or as a prop for a historical TV series, the classic car policy will not be sufficient. In such cases, the classic car owner will need to take out a classic car insurance policy that includes commercial use cover, although in the case of TV usage the studio might already have this cover in place. Naturally, in such instances the premiums will be higher.

The value

Finally, the value covered within the policy needs to be carefully negotiated with the insurer. Unless otherwise agreed it is likely that the terms of the insurance will be based upon a value at the time of a claim event. The problem is that this may not fully recompense the owner for the true cost of the vehicle and its restoration. It is possible with some classic car insurers to negotiate a situation where the value payable in the event of a claim reimburses the total cost or value of the vehicle to the owner. Naturally, the premium will be higher but it is well worth it to ensure that the overall investment in the classic car is recovered.

A final reminder

Like all auto insurances there are two important issues that the classic car owner has to heed. Firstly, it is essential to read the policy 'small print' to ensure that one is fully aware of the conditions and extent of the cover. Secondly, it is also important for the owner to ensure that they use the car within the terms agreed with the insurer. Even something simple such as exceeding the prescribed mileage can nullify the insurance.

Links

More on classic cars
The origin of the automobile - Steam cars
Classic cars - knowing the basics

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Tags

Automobile Insurance, Automobiles, Car, Car Insurance, Classic Cars, Motoring, Motoring Costs

Meet the author

author avatar Paul Lines
Having spent a large part of my working life as a business consultant, I am now a full time freelance writer offering content for on-line and print publishers, as well as focusing on creative writing

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Comments

author avatar Jerry Walch
18th Nov 2010 (#)

Very informative Paul.

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author avatar Paul Lines
18th Nov 2010 (#)

Thanks Jerry

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