If you drive a car that’s more than 20 years old, you might qualify for classic car insurance. In fact, you might’ve already looked into it, but quickly discovered that the qualifications, requirements, and coverage types are all a bit of a confusing mess.
Don’t give up too soon; unlike other forms of auto insurance, classic car insurance is like its own little rewarding puzzle. If you can untangle the mess of varying definitions and coverage types, you stand to save up to 60% on coverage for your vintage whip.
So what exactly is a “classic car”? What is classic car insurance, and how is it different from regular auto insurance? Most pertinently, do you and your cool old car qualify?
Let’s investigate classic car insurance.
What is classic car insurance?
Classic car insurance is a specialized policy that reflects how well owners maintain their cars and how infrequently they drive them.
To illustrate, let’s say you and your neighbor both own 1971 Camaros. His car is just a neglected commuter; a rusty bucket of bolts he somehow manages to drive 15,000 miles a year. His insurance company values the car at $2,000, so his collision and comprehensive coverage are dirt cheap (the insurance will only pay out $1,500 after his deductible).
However, your ‘71 Camaro is in showroom condition, perfectly maintained, and valued at $45,000. Plus, you barely drive it, maybe 1,500 miles a year to classic car shows and back.
Obviously, with such a massive gap in care, usage, and value, you and your neighbor need completely different insurance policies to protect your Camaros. Your policy should reflect:
- The true value of your car.
- Your low annual mileage.
- The extra care and maintenance your car receives.
Enter classic car insurance.
How does classic car insurance differ from regular insurance?
If you opt for classic car insurance over regular car insurance, what should you expect?
Classic car insurance covers the essentials
In most cases, classic car insurance isn’t considered an add-on, but an all-inclusive policy. That means it includes the following essentials:
- Bodily injury liability.
- Property damage liability.
- Uninsured/underinsured motorist coverage (depending on the state).
- Collision coverage.
- Comprehensive coverage.
Collision and comprehensive are considered an essential part of all classic car policies because they protect the value of the car. Remember – liability insurance, which is all most states require, protects other people’s property, not your own.
Classic car insurance covers the “agreed value” of your car
A 2021 Camaro may be objectively valued at $25,000, but a 1971 Camaro can be valued anywhere from $700 to $60,000. That’s why classic car owners work with insurance companies to get protection for the “agreed value” of their car.
How it typically works is you’ll get your classic car appraised by an independent third-party, and submit your appraisal to your insurance company. The appraised value represents the “stated value” since you’re telling your provider what your car is worth.
Your provider will then crunch some of their own numbers and come back with a proposed “agreed value.” This can often be a few thousand dollars less than the state value since insurance companies often won’t cover the value of non-factory modification, parts, or artwork as part of a total loss.
If your agreed value is way less than your stated value, you can stand your ground and insist that you get your stated value covered. After all, you want insurance to pay out enough to replace the car, or at least compensate you for how you value it.
Don’t worry; many CCI providers will happily oblige and cover you for the stated value (they’ll just charge you a little extra).
Classic car insurance is typically cheaper than regular auto insurance
Perhaps the most surprising difference between regular and classic car insurance is that the latter is actually cheaper. Way cheaper.
Even though classic car insurance typically includes liability plus collision and comprehensive, classic car coverage can cost less than half of a regular policy for the same car. Specifically, CCI costs around $50 per month on average, compared to $130 for a regular auto policy. In fact, it’s rare for a classic car policy to surpass $1,000 a year, even for high-value hotrods.
So why would you get a discount on coverage for a valuable car made of rare parts?
From the provider’s perspective, premiums are all about risk. When you get an insurance quote online, there are hundreds, even thousands of variables that go into your final number. In general, your provider is basing our quote on two things:
- How likely are you to file a claim?
- How expensive is that claim likely to be?
For classic car owners, #2 might get a little expensive, since old cars are made of rare and expensive parts. Plus, the agreed value of classic cars can range from $30,000 to $250,000, so a payout on a total loss can be high.
But the deciding factor, and why classic car insurance is so cheap, is the frequency of classic car claims (or lack thereof).
Classic car owners generally take exceptionally good care of their cars, wiping off the tiniest smudges with their business neckties before going into meetings. Plus, virtually all classic cars are stored inside, massively reducing the likelihood of a comprehensive claim.
Classic cars are also driven both rarely and carefully. Since roads = risk, classic car owners don’t drive much, and certainly don’t use them to commute. And when they do go for a drive, it’s not during rush hour or through a hailstorm – it’s typically to and from a car show, through empty roads under a canopy of warm sunlight, as Vivaldi gently pulses through the antique radio.
Sorry, I got lost picturing myself in an old Fiat 124 Spider for a second.
Anyways, the point is that classic car insurance is cheap because claims are rare. And claims are rare because owners take such exceptionally good care of the cars, garage them, and barely drive them.
Now, if your car is 20 years old, you might be wondering whether you’re about to save a ton of money by switching from regular to classic car insurance.
I hope you qualify, but before you get too excited, let’s dive into the caveats and requirements.
However, classic car insurance has strict requirements to maintain coverage
Not every classic car will be eligible for classic car insurance. Here are common requirements from both driver and vehicle:
- Your car must meet the provider’s definition of “classic”. As I mentioned above, every provider has their own definition of what’s a classic and what isn’t. Simply put, not every car older than 20 years will qualify for coverage. For example, Liberty Mutual only considers a car to be a classic if it’s 25+ years old and “gains value as it ages.” That may sound like a wide net to cast, but a ton of classic cars have actually lost value and may not qualify.
- The car must be kept in “collector condition”. In order to qualify for classic car insurance, you must keep your car in pristine condition. I mean, it probably already will be for the appraisal process, but your provider wants you to keep it that way. Per State Farm: “The car (generally) must be restored, maintained and preserved in its original condition, or undergoing a restoration”.
- There are strict driving and mileage limitations. Classic car insurance is really only meant to protect your car on its way to and from car shows and the occasional Sunday drive. A typical CCI policy will restrict mileage to 2,500 miles per year or less, and you often cannot drive your classic car out of state (only on a trailer). Hagerty’s, Allstate’s preferred vendor for CCI, clearly states that their policies only cover “club functions, exhibitions, organized meets, tours and occasional pleasure driving – it just can’t be your daily driver.”
- Private, enclosed storage is required. Pretty much every CCI provider will require you to keep your classic car stored in a garage or other private storage unit. Your apartment parking garage probably won’t qualify since it’s not enclosed and you can still get hit by your neighbors. Providers have been known to make exceptions for driveway carports or canopies, but with a commensurate rise in premiums.
- You must be at least 25 with a clean driving record. Most CCI providers have strict requirements for the drivers, too. You must be of a certain age (usually 25) and have zero violations on your driving record in the last three or more years.
Now you know why most folks don’t get classic car insurance on their older cars; they simply don’t qualify. Sure, the rates are astoundingly cheap, but that’s because CCI providers basically want your car soaking in olive oil between car shows. That’s what most classic car owners want for their cars, too, so it’s not a problem. The high bar just highlights how CCI is a distinctly niche product.
Should you buy classic car insurance?
That said, if you do meet the five rigorous qualifications above, is classic car insurance right for you?
You should buy classic car insurance if…
- Your second car is a pampered classic car. If you own what’s clearly a classic car and you only really drive it to and from auto shows, you’re the ideal customer for classic car insurance. Whether you currently have regular auto insurance or no auto insurance, a CCI policy is a huge upgrade.
- You daily drive a classic car, but also take exceptionally good care of it. If you drive a classic car as your primary car, you may still qualify for a higher-mileage classic car insurance policy of 6,000, 10,000, or unlimited annual miles. Naturally, premiums on these high-mileage classic car policies aren’t as cheap, and the other requirements are even more stringent (garaging it for example), but you may still save money and get better coverage compared to regular auto insurance.
You shouldn’t buy classic car insurance if…
- Your classic car isn’t kept in pristine condition. If you keep your classic car in decent, but not showroom condition, you may want to consult with your insurance company before committing to a policy. The last thing you want to do is fib about its condition; your provider will see photos of it in the event of a claim, and if they see it was in mediocre shape the whole time they may not pay out.
- The costs of garaging and maintaining your classic car exceed the savings. Maybe you aren’t garaging or maintaining your classic car right now, but you’re thinking about it so you can qualify for some super cheap classic car coverage. I certainly don’t want to discourage you, since electric cars are coming and we need to preserve every classic car that we can. But since this is a finance site, not a car enthusiast site, I’m compelled to remind you that the savings on classic car insurance are only ~$1,000 annually, at max. Garaging and maintaining a classic car to providers’ standards can cost $500 a month. So classic car insurance is really only for folks who are already qualified for it.
Where to buy classic car insurance
Not every insurance provider offers classic car insurance, and not every provider that does offers competitive coverage and rates. Here are some places I recommend you start your search.
- Liberty Mutual carefully tailors each CCI quote to car and driver, so while it’s impossible to say how competitive their rates will be for classic car insurance, I feel comfortable recommending them because of their size, experience, and excellent track record.
- Allstate refers CCI shoppers to Hagerty, and as you can tell from the beautifully restored C3 Corvette on their homepage, Hagerty totally understands classic cars. It’s possible that Allstate customers will receive a referral discount when buying Hagerty insurance, so be sure to call Allstate first.
- Progressive also refers their CCI customers to Hagerty. They do so because Hagerty (through their Drivers Club) offer 24/7 roadside assistance for lockouts, battery jumps, tire changes, and more. This can come in handy, especially with an older car.
What defines a car as classic?
If you think you own a classic car, you’ve probably considered purchasing classic car insurance. But how can you be sure if your car is a classic? Are classic, antique, and vintage cars the same, and how does coverage work?
Classic vs. antique vs. vintage cars
Broadly speaking, a “classic car” is a car that’s old. Or cool. Or some combination of both.
Vehicles that fall under the classic car umbrella typically include:
- Cars older than 20, 25, or 30 years.
- Custom cars.
- Exotics, like Lotuses (Loti?) and Ferraris.
- Kit cars.
- Restored government vehicles like Willys Jeeps and fire engines.
- Race cars.
And more. The term “classic car” casts a wide net, and everyone’s definition is different. State DMVs, historical societies, and insurance companies can’t seem to agree on what constitutes a classic and what doesn’t.
For example, the California DMV classifies every car made between 1922 and 25 years ago as a classic. But any car with an engine size of 16 cylinders or larger is a “horseless carriage.” According to Allstate, however, even cars made in the 2000s can be classics, as long as they’re, ya know, cool.
Refusing to fan the flames of debate, even the Insurance Information Institute gives a fuzzy, non-committal definition of a classic car.
At the end of the day, however, the only definition that matters is the one coming from your insurance company. American Collectors Insurance offers a nice, middle-of-the-road definition (pun intended).
- Classic cars – A classic car is any car that’s at least 20 years old, well-maintained, and rarely taken out, typically just for auto shows or the occasional pleasure cruise. Common “modern classics” include 80s Ferraris and 90s Japanese imports like the Toyota Supra or Honda NSX.
- Antique cars – An antique car is a classic car manufactured before 1975. The most famous example is the 1968 Ford Mustang.
- Vintage cars – A vintage car is a classic car manufactured before 1930, like a Ford Model T (a surprising amount of which still run great today).
Most insurance companies consider all three types to fall under the “classic car” umbrella, so classic car insurance applies to antique and vintage cars as well. The only difference is that insurance companies might offer additional insurance to cover older cars.
Classic car insurance is surprisingly affordable and robust, making it a no-brainer for the right classic car owners. Not all vehicles will qualify for coverage, however; you typically have to keep your car garaged, well-maintained, and drive it fewer than 2,500 miles per year.
But if you do qualify for classic car insurance, $50ish a month isn’t a high price to protect your most prized, four-wheeled possession.