How Insurance Companies View Your Older Car

By InsuranceHotline.com Team
A grandfather and grandson washing a classic Ford mustang in the driveway.

Any car lover knows there’s a big difference between a car that’s getting old and a car that’s become a classic. Car insurance companies know the difference too and insuring a classic, antique, or collector car is a very different matter from insuring a car that simply has a number of years, and kilometres, on it.

A Difference in Value: An Old Car vs a Classic

Your car doesn’t automatically become a classic or antique because of its age and if you have an older car, you’ll want to make sure you have the right insurance for it.

In general, vehicles are valued by the insurance company based on a number of factors, and they depreciate with every passing year. When an older car is insured on a standard insurance policy it will be valued in the standard way. This means that the insurance company treats it as though it is simply an aging car – in other words, nothing special.

An antique or classic car is a different matter altogether. Classic cars need to be assessed differently because they are usually more valuable due to the money, time and effort that has been spent to keep them in tip-top shape. As a result, an appraisal by an expert is typically needed to ensure that these vintage vehicles are insured for the right amount which is often more than what a standard policy would offer.

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Types of Policies

A standard insurance policy is designed for vehicles that are used as everyday cars – for commuting to work, running errands, and taking the kids to school, for example.

A classic (or antique) insurance policy, on the other hand, is for vehicles that are not expected to see this kind of use. As a general rule, classic, collector, and antique cars are stored and only come out for special occasions or pleasure drives to show it off.

Because of the difference in use, as well as the difference in value, auto insurance for vintage vehicles cover the car for the special risks of owning a classic or collector car (e.g. higher replacement costs) while also meeting the minimum insurance requirements needed to take to the roads.

Classic, collector, or antique car policies are not available from all car insurance companies. There are companies that specialize in this type of vehicle insurance to ensure the specific needs of the car’s owner are met.

Restrictions on Use

When you insure your car under a classic or antique auto insurance policy there are often a few restrictions you need to consider. The policy is not designed for a car that is driven on a daily basis, for example. Often these policies also restrict the use of the car (no racing or off-roading) and some limit the number of annual kilometres driven.

If your classic car is driven on a daily basis, it may not qualify for a collector car policy. It’s important to be honest with your insurance company about how you use the vehicle to make certain it is insured properly. If a claim is filed and the car has been used outside the confines of the policy, the result could be that the claim is denied.

Insuring Your Older Car

If you aren’t certain what type of policy your older car needs, take the time to talk with an insurance professional. Based on the age, value, and use of the car, you can determine whether you need a standard policy or a specialized collector car policy.

Remember that if your car has a higher value than a car of that year, make and model normally would due to restoration or modification, it’s important that your insurance company be aware of this, or you won’t have any coverage for that value. Insure your older car properly, so you won’t lose your investment if something goes wrong.