Any person with a classic car can get standard auto insurance, and it would work just fine.
Every car driven on the road and every driver who drives it needs car insurance. Auto insurance is as essential to driving as a steering wheel; driving without one would get you in big trouble. 49 states out of the 50 in the US require drivers to have liability insurance, while twelve states have made it mandatory to own a personal injury protection plan. In comparison, twenty states require drivers to get uninsured motorist coverage.
So it is evident that car insurance is necessary to legally and safely drive a car. But what about those cars that are not meant to be driven regularly? Vehicles that are mainly used for display? We are talking about classic cars.
If someone owns a classic car, should they buy general auto insurance policies, or is there something special for unique vehicles? In this article, we’ll discuss everything you need to know about classic car insurance; what it is, how to get it, and what kind of coverage comes with it.
What is Classic Car Insurance?
As the name suggests, classic car insurance is just like standard auto insurance policies but with some added features and qualities to work specifically for classic cars. Any person with a classic car can get standard auto insurance, and it would work just fine.
But there are some problems with getting general auto insurance for classic cars. Some of the significant issues are:
The classic car won’t be driven regularly.
Classic cars are meant to be preserved and kept as collectibles. If you have a classic car valued, you will not use it as your daily driver. An average car insurance plan would make it legal for you to drive the car around, but you would be overpaying for it.
The Actual Cash Value Proposition
Here’s the biggest issue with general car insurance and classic cars. Regular cars that are used every day, such as your average Nissan or Hyundai, have a depreciating value. It means that each day the value of the vehicle goes down.
The value depreciates. So the car that you bought five years ago will be worth much less today. But this is ultimately the opposite for classic cars.
When it comes to classic cars, as time passes, the value of the car increases, now, the problem with general auto insurance is that the actual cash value of the car (current market value) decreases with time.
General car insurance is suitable for standard cars, but you need a particular car insurance policy that agrees on a price that does not depreciate. So in case the classic car is stolen or totaled, you get the price decided upon, not the depreciated one.
What Comes with Classic Car Insurance
Classic car insurance is very similar to general car insurance when it comes to coverage. It comes with all the basic policies that cover the cost of repairs and medical treatments needed by both the driver and the other driver involved in the accident. Here’s all that comes with classic car insurance:
Classic car insurance comes with liability coverage. Liability insurance is mandatory in almost every state, and drivers must have it if they have a car registered to their name. It does not matter if they drive the car or not; liability insurance is a must if you own a car.
Liability insurance covers the cost of property repair (car repairs, etc.) and medical treatments needed for the other driver involved in the accident caused by the policyholder.
So if someone is driving their classic car and gets in a car accident and it is their fault, liability insurance will cover the cost of the accident for the other driver.
What happens if the classic car gets in an accident? Fixing these valuable cars is a challenging and costly job. The cost of repairs is extremely high. This is why classic car insurance comes with collision insurance.
Collision insurance covers the cost of repairs to the car needed after the road accident. It involved any form of a collision accident, irrespective of whose fault the accident was. The only condition is that the driver must have a driving license, and the accident must be unintentional.
Collision accidents are not the only way a car can get damaged. Natural disasters like earthquakes, floods, fires, hurricanes, etc., or falling trees or projectiles can damage the vehicle or even total it.
Comprehensive insurance, also called “parked car,” insurance covers all these damages. It also includes damages due to riots, vandalism, etc. Theft is also covered in this policy, so if the classic car is stolen, the agreed price of the vehicle will be paid to the policyholder by the auto insurer.
It is prevalent for classic car insurance to come with roadside assistance. RSA offers services that you might need if your car breaks down in the middle of the road. It includes jump-starting the car, changing the tire, refueling, towing, winching, etc.
What it Does Not Cover
While the benefits of classic car insurance are totally worth it, there are some things that you need to know. The auto insurer puts some terms and conditions before taking your car into the policy.
For example, classic car insurance is not for the classic cars that are driven every day. Almost every company does not allow the everyday use of the classic car if you want the coverage.
Occasional drives, driving to motor shows, etc., are permitted. But dropping kids at school or going to work is not allowed. Apart from this, classic car insurance is also costly.
Not just that, even general car insurance is getting very expensive. Make sure you choose the right car insurance company for general and classic car insurance.
For example, if you are living in Illinois, look for the most affordable Illinois car insurance companies, compare their offering and select the one that fits your requirements the best and is affordable.
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