Insuring a classic car is not as easy as insuring a more standard vehicle, so it is important to know a little about how the policies differ and what restrictions to watch out for. You must first ascertain whether your car qualifies under the classification of ‘classic’. The classification of a classic car will differ from insurance company to insurance company, so you will need to do some research to determine what each insurer’s definition of ‘classic’ is.
Most insurers will actually accept classic cars on their standard car insurance policies, but you may face high premiums if you choose to do this. The agreed value clause, which pertains to the minimum amount that you will receive in the event that your vehicle is in an accident or stolen, and is the primary benefit of purchasing specialty insurance, will not apply when classic cars are placed on standard auto policies.
It will be the present prices being offered in the market, that will determine what the average insurance company will pay you in the event that you make a claim. For classic cars, this often presents a problem as working out their market value is not easy. It is not uncommon for insurers to place a lower value on your vehicle that you would like, and you will have to accept the amount paid even if you do not believe it was high enough.
When it comes to classic cars, the value of a single car model can differ by 50% or as much as 500%, as the market for these types of vehicles is highly price sensitive. With the absence of an agreed value clause, a classic car that is a limited edition, is in mint condition, or has providence, will never bring an amount equal to what it is truly worth. The objective of the majority of insurance companies, is to pay you the least amount that they can, and standard insurance companies are especially known for this.
In order to take out a classic car insurance policy that includes an agreed value clause, your insurer will ask you to adhere to strict insurance guidelines. For example, these policies often have an annual mileage cap, designed for classic car owners who infrequently drive their cars. Other guidelines that you may have to adhere to are adding security measures to your vehicle, and putting a limit to the number of classic car shows that you can participate in.
The more rare and desirable your car is, the more you will have to pay, however, due to the restrictions often put in place, classic car insurance policies tend to be relatively cheap. When shopping for a classic car insurance policy, having the agreed value clause included in your policy, should be a priority for you, and it is recommended that you live with a more expensive premium in order to have this clause included.
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