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Protecting your automotive investment is especially important when it’s a vehicle you’ve put time, money and effort into restoring. And while the value of sweat equity is difficult to quantify, with collector car insurance you can insure your car for its true value. Without it, you’re only covered for an arbitrary — and usually lower — blue book figure.
Photo Credit: Acura Integra Newsroom
Why It Makes Sense
One of the vehicles in my personal collection is a low-production, unmodified 1992 Acura Integra GS-R hatchback. Recent marketplace trends suggest this 30-year-old car is a current and future classic. Based on 252,00 miles and very good condition, Kelley Blue Book quoted these figures:
- Trade-In: $150 to $768, average $330
- Private Party: $305 to $1,750, average $1,028
With traditional automobile insurance, the valuation and payout would be based partly on those numbers. An adjuster may also consider comparable marketplace examples — many of which are likely in poor condition, given the age and mileage.
In contrast, a professional appraisal in February 2022 said the car — which is restored and in exceptional shape — is worth $18,000. A similar make, model and trim sold at an online collector auction in late January for that amount.
In the event of an accident, an insurance policy should recognize the car’s actual marketplace worth. A policy from a collector agency does that. Many national insurers offer classic vehicle coverage, but there are some that focus solely on this type, including American Collectors, American Modern, Grundy, Hagerty and Heacock.
Are There Benefits?
A collector car claim settlement uses a guaranteed or agreed value, as opposed to book value. You and the insurer decide on that amount based on the car’s condition. Some policies also provide considerations for lost or stolen spare parts, like hubcaps, or even towing.
A collector policy premium is significantly cheaper than a traditional policy — about two-thirds less, according to Hagerty. That’s partly because insurers recognize — and mandate — that the vehicle isn’t on the road much, typically 7,500 miles or less per year. Fewer miles driven equates to a lesser risk of accidents or incidents necessitating an insurance claim.
Depending on the state, there may be other benefits. For example in Arizona, holding a collector insurance policy qualifies as an exemption from bi-annual emissions testing.
What Vehicles Qualify?
Specific eligibility criteria varies, but as a general rule, vehicles at least 25-years-old are considered classics. Some insurers extend that classification to cars just a decade old.
Insurers may require an in-person inspection to confirm the vehicle identification number. You may also be asked to provide photos.
A vehicle undergoing active restoration may qualify for partial insurance. You can insure whatever you have (like the chassis), then update the policy as you complete the project.
In addition to classic cars, collector-type vehicles such as late-model sports cars, luxury vehicles and hot rods, all fit the criteria. Basically, if it’s considered a specialty vehicle, an argument can be made for a collector insurance policy. Some insurance companies may accept kits, but most decline heavily modified models.
A driver’s own track record is an important consideration. Just like a traditional policy, an agency may evaluate prior claim and accident history. Also, only those drivers on the policy are covered.
Mileage and Purpose
The main rule for collector eligibility is that the vehicle cannot be used as a daily driver, and in some cases, cannot even be a back-up vehicle. Proof of a commuter car may be required.
Parades, shows and weekend drives are acceptable ways to enjoy a collector car. Expect racing to be prohibited, due to the obvious inherent risk.
A collector insurance agency will ask where you plan to keep the vehicle. Street and open lot parking is usually prohibited. A secure, fully enclosed garage or pole barn is preferred.
Getting a quote from a collector car insurance provider is free and straightforward. With a bit of research and comparison shopping, you may find collector insurance costs less than your existing premium and offers better protection for your pride and joy.
Check out the listings on KSL Cars to see if your classic dream ride is waiting for you.