Everything you always wanted to know,
but were afraid to ask!

Insuring Classic and Specialty cars can be confusing for first-time buyers and veterans alike. Many questions arise as to the types of vehicles that can be covered, as well as types of coverage, the costs, and what happens in the event of a claim.  As more and more insurance companies merge globally, we thought it would be useful to find out what some of the more frequently asked insurance questions are. This should help you decide if Specialty Insurance is right for you.  We enlisted the help of McKeel Hagerty a leading expert on specialty auto insurance, he helped us categorize the most common and important questions and provided what we hope we be some informative and helpful answers.

How do most owners of collector cars have them insured?
Do specialty insurance premiums really cost less than standard insurance premiums?
Do you have to own a new car in order to get specialty car insurance?
How new does that car have to be in order to qualify?
Do you have to insure BOTH the 'daily driver' and the 'Specialty' car with the same insurer?
Are there differences between specialty insurance programs for collector vehicles?
What choices of coverage do I have?
What kinds of vehicles are considered collectible?
Do specialty insurance programs have a vehicle age cut off?
Is there specialty insurance for street rods and customs?
I have an exotic, can I get specialty insurance coverage?
Don't collector car programs impose mile restrictions?
Am I limited to driving my collectible only in parades or shows?
What other usage limitations might there be?
Can young drivers be covered in a specialty insurance policy?
What are the determining factors of computing an annual premium?
What if I have five cars - do I get a break on my premium?
How do you value a classic?
What happens if I have a claim?
Can you temporally 'suspend coverage', when you put your car away for the winter, say just reduce the coverage to fire, theft and vandalism in order
to get a break on the premium?
Isn't it easier to stay with my standard insurer?

How do most owners of collector cars have them insured?
Less than half of the collector vehicles on the road today are insured by specialty programs. Although collector car insurance has been available for five decades, most owners of collectibles, specialty cars and street rods are still insuring them through a standard insurance company, and often paying higher premiums for more restrictive policies.

Do specialty insurance premiums really cost less than standard insurance premiums? Yes. Standard insurance annual premiums can cost up to 500% more than those offered by a specialty program. Although standard companies provide adequate coverage for the 'Daily driver', they rarely offer the added benefits associated with collector car programs.

Do you have to own a new car in order to get specialty car insurance?
No, but generally you must own and use a 'daily driver' vehicle.

How new does that car have to be in order to qualify?
Each customer's information is reviewed and decisions are made on a case by case basis, so there's no set cutoff for a customer's daily driver.

Do you have to insure BOTH the 'daily driver' and the 'Specialty' car with the same insurer?
Definitely not. Your daily driver should be insured with a standard insurer and your collector car with a specialty insurer in order to receive the lower rates.

Are there differences between specialty insurance programs for collector vehicles? Although there are several fine specialty programs, there are differences among them. Levels of service, rates, types of coverage and claims handling all vary from program to program. Anyone insuring a collectible should research all programs before making a final decision. Varying costs should be considered, of course, but should not be the determining factor. REMEMBER when buying insurance you are buying 'service' so first look for quality customer service, excellent claims handling, knowledgeable staff who know and understand collector vehicles, and an overall impression that they care about you as a customer.

What choices of coverage do I have?
There are three types of automobile insurance coverage offered today: Actual Cash Value (ACV), Stated Value, and Agreed Value. ACV coverage is what insures most everyday cars and pays out a depreciated 'book' value in the event of a claim; the older a car is on an ACV policy, the less value it has. Some insurance companies offer Stated Value policies for collectibles. These policies are better than ACV because they allow you to 'state' a value for your vehicle greater than its depreciated 'book' value. But, Stated Value can still depreciate vehicles because the policies generally require the insurance company only to pay up to the 'stated' amount. Only Agreed Value insurance policies guarantee you will get all of your money back in the event of a total loss. There is no depreciation of a car's value with an Agreed Value policy.

What kinds of vehicles are considered collectible?
This is a difficult question to answer briefly because the market is broadening so rapidly. It's not just Jaguar XKE's, '57 Chevys and Packards anymore. Now, Hot Rods, muscle cars, vintage pickups, vintage racers, sports cars and even 70's cars are being collected. The old categories of "antique and classic" are still there for the purists, but today people are collecting more and different cars than they used to. Yes, even AMC Pacers are finding a niche within the hobby, especially if they have the Mojave stitched interior option!

Do specialty insurance programs have a vehicle age cut off?
While the old standard used to be 25 years and older, it is always best to inquire on a per-vehicle basis. There are new cars that are insurable as collector cars, however these tend to be exotics or sports cars.

Is there specialty insurance for street rods and customs?
Yes. Rods and customs are a very important part of American automotive history. But because the very nature of these cars is that each is unique, there are some differences in how they are insured. The difficulty is in determining their value. You can't just look in a value guide to see how much they are worth. So insurers dig a little deeper into the mechanical and aesthetic modifications made to the car, its horsepower, suspension system, paint scheme, etc. It doesn't take long to determine a value based upon the base value of the car to begin with, then the parts and labor that were added. Quality of the parts and workmanship are important factors. And in some cases there is a premium put on cars that were 'built' by well known or famous builders.

I have an exotic, can I get specialty insurance coverage?
Yes, insurers tend to look for rare vehicles that will be used as a collector car rather than a daily driver; this indicates that the car will be kept in good shape and therefore the value will be maintained.

Don't collector car programs impose mile restrictions?
Many specialty programs strictly limit owners to driving their collector vehicles 2,500 miles per year or less. They may even require annual odometer readings. However, if a person has regular cars that are driven daily and their collector cars are used on a limited basis consistent with owning a valuable vehicle, it is possible to find programs that don't impose strict mileage limitations, so ask.

Am I limited to driving my collectible only in parades or shows?
Enthusiasts like to share their collector cars with the public but they also just enjoy driving them around, like going for a Sunday cruise. While some programs require that collector cars only be driven in activities of public interest, some allow for and encourage the private enjoyment of collector cars. Nevertheless, collectors should consider these types of restrictions and find a policy with flexible usage guidelines that best suits their overall needs.

What other usage limitations might there be?
Yes. Most specialty insurance programs do not allow vehicles to be used for the commercial transportation of goods or passengers, for racing, or for daily transportation.

Can young drivers be covered in a specialty insurance policy?
It depends. Many specialty insurance companies require that all drivers are 25 and older, some even require that a person be 30 years old. But there are some exceptions, so ask your insurer.

What are the determining factors of computing an annual premium?
In America insurance is regulated on a state by state basis. So although there are slight differences, generally they are fairly consistent. Physical damage coverage comprehensive and collision makes up the majority of a given premium. This is calculated by the value of the car and its age. For example with 'Hagerty': if the physical damage price on a 1965 Mustang worth $10,000 is $60; if the car was worth $20,000 then the physical damage rate would be $120. Liability coverage's are much more complicated to explain, but fortunately for consumers they are very inexpensive usually somewhere between $30-50.

What if I have five cars - do I get a break on my premium?
You can, some insurers only ask you to pay a single liability charge no matter how many collectibles you own. After all, you can only drive one car at a time!

How do you value a classic?
While insurers are not in the business of appraising cars, they are in the business of insuring the 'value' of cars. So they spend a great deal of time watching the market and helping people adequately insure their car for an appropriate value. With this, there are many factors that are considered when valuing a vehicle. The first consideration is whether the car is a stock original vehicle. If so, there are many resource guides and pricing books that can provide value guidelines based upon the overall condition of the vehicle. These are somewhat less useful for newly restored vehicles and even less useful for street rods; because every newly restored car is restored to a different level of perfection and every modified car is different by nature. So with both newly restored and modified cars, insurers dig a little deeper into the project. They look at the amount of money spent; the type of parts used, etc. The best advice for people restoring cars or building a street rod is to keep detailed lists of the work performed and receipts for all parts and labor. This will help greatly when attempting to insure the car properly and the whole process will be smoother. Occasionally, certified appraisals help but they're not always necessary.

What happens if I have a claim?
Unfortunately, this question isn't asked often enough. When you call to report a claim, you want a friendly, sympathetic voice who is ready to solve your problem immediately (rather than an impatient stranger who dickers with you over how much the insurance company is willing to pay). So, try to get some referrals from customers who have had to make a claim.

Can you temporally 'suspend coverage', when you put your car away for the
winter, say just reduce the coverage to fire, theft and vandalism in order
to get a break on the premium?
Because premiums are so low it would not be cost-effective or good business for specialty car insurance companies to add and drop coverage on every vehicle.

Isn't it easier to stay with my standard insurer?
Ask yourself the following:
Do I mind paying a significantly higher annual premium?
Do I mind paying more than one liability charge on my collection?
Will I get the full value of my classic back if it's totaled?
How will I be treated when I have a claim?

The bottom line? Specialty insurance can save you a lot of money, because these programs offer not only lower rates, but usually far better coverage than standard insurance policies. For more information and to view a selection of companies that offer such policies, Click Here.