Saving on Classic Motor Car Insurance
If you pick the right policy, insurance on classic motor cars doesn't have to be as expensive as you might think. Insurance companies know that the car being insured is a collectible, and these cars are usually better maintained and driven less frequently than modern commuter vehicles. Unfortunately, picking the right policy is where many motor car owners go wrong. Over half of all classic cars are insured by a mainstream car insurance company, rather than a specialist who deals in motor cars.
The problem with standard policies is that, in most cases, claims are reimbursed on an Actual Cash Value (ACV) basis, which means that you're compensated for what you originally paid for the car, possibly subtracting for depreciation. If the Chevy Corvette you purchased in 1977 for $7200 was totaled, this is what you would be paid by the insurance company-or less, if depreciation is applied-even if its market value was $16,000.
If your car is a collectible, avoid standard car insurance policies if at all possible. For motor cars, your best bet is to use one of the two other types of insurance available: Stated Value and Agreed Value. Under a Stated Value agreement, the insurer lets you state the value of the car, and in most cases, this is the amount you'll be reimbursed in the event of a claim. However, depreciation might be factored in, and you'll need to read the fine print of your policy to ensure that the coverage is, in fact, for the stated value. It's also likely that you'll have to pay a deductible under a Stated Value claim.
The most favorable arrangement for motor car insurance is the Agreed Value. Since the Agreed Value is a mutual valuation between you and your insurer, it may not be as high as what you would designate for the Stated Value. On the other hand, you're reimbursed 100% of the Agreed Value, and there's no deductible.
Hot rods and custom cars are best avoided if saving money on insurance is a key consideration. If you must modify a car, be sure to document the parts and labor of every addition meticulously, and bring this paper trail to your agent when obtaining a quote. More than other motor cars, custom builds should only be insured through a specialty insurance company like Leland West Insurance, who knows which builders are reputable, and will increase you modded car's valuation if it's recognized to have rare options. Leland West Insurance specialists are almost always the best option for getting cheap motor car insurance.
