Classic Car Insurance

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Classic Car Insurance

Written by Lisa Rennie
Fact-checked by Caitlin Wood

Classic Car Insurance

Categories

Auto Car Insurance

Most cars you see on the road are meant to get people from point A to point B. But, there are also a handful of vehicles that are meant more for sport or leisure, and classic cars fall under that category.

As the owner of a classic car, you’ll need to take out an insurance policy on it. But that doesn’t mean you should buy just any standard auto insurance.

Instead, what you need is classic car insurance, which is tailored specifically to these types of vehicles. 

What’s The Difference Between Classic Car Insurance And Regular Car Insurance? 

Classic collector cars are not like regular cars that you see out on the road. As such, insurance policies for classic cars are a bit different from a regular auto insurance policy. Here are some ways that classic car insurance differs from traditional auto insurance:

Cost

The most important difference between these two types of policies is cost. Classic car insurance is usually cheaper than regular auto insurance, mainly because these vehicles aren’t usually driven on a regular basis. 

Car Value

Generally speaking, a vehicle loses value the moment it is driven off the car dealership lot. Cars may be valuable assets, but they don’t usually retain their value like other valuable assets, such as a home. However, classic cars are a bit different in this department. Instead, they can actually increase in value over time, as long as they are well-maintained.

If your collector car is totalled, a classic auto insurance policy would pay you what the car is currently worth, which is likely more than what you paid for it given its appreciation in value. If you insured the vehicle with regular car insurance, you likely would not get anywhere near what the car is worth. As such, you’d be much better off with an insurance policy that is specifically tailored to classic cars and the value that comes with them.

Cost Of Repairs

Collector cars are typically a lot more expensive to fix than regular cars. That’s because the parts are not usually mass-produced or readily available. Getting your hands on the parts required for repair can be a lot more challenging, and the parts that are needed can be more expensive than regular car parts. 

Restrictions

There may be certain restrictions placed on how your classic car is used with a classic auto insurance policy compared to a standard auto insurance plan. Classic car insurance places usage limitations on how the car is to be used. 

For instance, your classic car cannot be your everyday vehicle that you use to commute to and from work or to run errands. Instead, it should only be used for leisurely purposes, such as taking it to a car show or other event. Some policies may also specify how many kilometres you can put on the car every year or whether or not you can take it out of the country. 

How Does Classic Car Insurance Work?

A regular car insurance policy will provide coverage based on the car’s “staged value” in the event that the vehicle is totalled or stolen. Your insurance provider will pay you the staged value, minus any depreciation. 

Classic car insurance works differently. Since classic cars do not depreciate in value, a staged value does not apply. Instead, an “agreed value” will be negotiated between you and your insurance provider, and no depreciated value will be factored into the equation if your car is ever stolen or totalled. Instead, you would receive the full agreed value from your insurer.

You may also get coverage for spare parts, which protects against expensive replacement parts that may be required to repair the vehicle.

Classic car insurance also includes the typical features that you would find with a standard car insurance policy, including the following:

  • Third-party liability. This mandatory policy provides coverage in the event that you cause damage to another car or injury/death to another person in an incident involving your car. 
  • Accident benefits. This policy will cover the cost of medical expenses or loss of income if you’re ever injured in an accident.
  • Comprehensive. For an additional fee, you can get comprehensive insurance, which covers the cost of repairs for your car if it is damaged by events other than an accident, such as theft, fire, or flying objects.

What Kind Of Cars Are Eligible For Classic Car Insurance? 

A classic car is one that is at least a couple of decades old that still operates well and has been completely restored. Some newer cars might qualify as a classic car, but these are more of an exception. Different insurance companies may have their own specific definitions in terms of the age of the vehicle. 

Classic auto insurance policies usually cover the following types of automobiles:

  • Classic cars
  • Antique cars
  • Muscle cars
  • Exotic vehicles
  • Hot rods
  • Race cars
  • Cobra replicas
  • Classic motorcycles

Factors That Affect The Cost Of Classic Car Insurance

As mentioned earlier, the cost of classic car insurance is usually less than a standard policy. However, there are a few factors that will impact exactly how much you pay in premiums, much like with a regular car insurance policy:

Driving Distance

Classic car insurance is meant for limited and occasional driving. The fewer kilometres you put on the car, the better for your premiums. 

Driving Record

Like a regular car insurance policy, your driving record will impact the cost of your plan. A clean driving record means you are less of a risk to your insurance provider, which will translate into lower premiums. 

Number Of Drivers On The Policy

If you are the only person on the policy who is listed as a driver, your policy won’t be as expensive as it may be if there are multiple drivers listed. 

Security Measures

Cars that are equipped with security features, such as a car alarm, present less of a risk and will be rewarded with lower premiums. 

Age And Experience

You will probably need to be at least 25 years old to insure a classic car. A driver who is a bit older and has more driving experience can help reduce risk and subsequently reduce premium costs. 

Primary Vehicle

Since a classic car is not meant to be driven every day, you may need to show proof that you own another car that you use for everyday commuting. 

Benefits of Classic Car Insurance

There are a couple of key benefits to classic car insurance:

Lower Premiums

As mentioned earlier, the cost of a classic car insurance policy is usually cheaper than that of a standard policy. As such, you’ll be saving money every month on premiums if you take out a policy that is more appropriate for your classic car.

Agreed Value

Perhaps an even bigger perk of a classic car insurance policy is the fact that you will be covered for the agreed value of the vehicle rather than a depreciated staged value. That means you’ll be paid out an amount equal to the actual current value of the car, which can be significantly more than what a staged value payout — minus depreciation — would leave you with. 

Where Can You Get Classic Car Insurance? 

Classic car insurance policies can be purchased from the following entities:

Banks

Your financial institution likely offers insurance products, including classic auto insurance policies. 

Insurance Companies

You can call up individual insurance firms to inquire about their classic car insurance offerings by speaking directly with a representing agent. 

Insurance Brokers

An insurance broker is an independent professional who does not work specifically with one insurance company. Instead, they deal with a network of firms and will do the legwork to comparison shop for you to find the best policy with ideal coverage at the lowest price.

Online Insurance Aggregator

You can quickly and easily compare different insurance companies and their policy offerings and rates by using an online aggregator that will populate all the available policies based on the details you provide, including your location and the type of car you wish to insure.

Final Thoughts

No matter what type of car you drive, it will need an auto insurance policy. But if you drive a classic car from time to time, you’ll want to take out a more specialized policy that is designed specifically for these types of vehicles. A classic car insurance policy will help you save money on premiums while ensuring a bigger payout in the event that your car needs to be replaced.


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Lisa has been working as a writer for more than a decade, creating unique content that helps to educate Canadian consumers. She specializes in personal finance, mortgages, and real estate. For years, she held her real estate license in Toronto, Ontario before giving it up to pursue writing within this realm and related niches. She enjoys sharing her knowledge and experience in real estate and personal finance with others. In her spare time, Lisa enjoys trying funky new recipes, spending time with her dog, and of course, revelling in the joy of family.

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