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Finding Insurance For Classic Cars

Updated on March 23, 2010

Insurance For Classic Cars

Classic cars are not typically insured the same way as normal automobiles.  A blue book value on a classic ‘57 Chevy Bel Aire may vary widely since many cars of this vintage are not in pristine condition or may have close to 100,000 miles on the odometer.  Where a nicely restored car with low mileage can easily demand more than $50,000.  A normal replacement value insurance policy cannot possibly take in account the value of a rare or one of a kind vehicle.

There are generally two types of coverage that are recommended by insurance agents for classic cars.  They are stated amount coverage or actual cash value coverage.  Which coverage is the best is pretty easy to sort out. 

A stated amount car policy uses an established value of a vehicle to set the maximum policy amount for a particular vehicle.  The value of the vehicle is established up front, not from the blue book value, but from an appraisal of the car.  It is a good idea to take detailed photos of the car, have documentation including the cost of the vehicle and the cost of any repairs, and the appraisal documentation to present to the insurance agent to establish a stated amount policy.  This will help set the maximum claim amount should the vehicle be stolen or damaged.  The maximum amount cannot be exceeded for a stated amount policy so if the appraised amount is set and the car is stolen several years later but has a market value higher than the stated amount, the maximum you will receive is the original maximum.  The same is not true if the market value of the vehicle goes down because there is a downturn in the economy or for other reasons.  So if the car is only worth 75% of the original maximum stated amount the policy is worth, then only 75% of the maximum with be paid by the insurance company.  As you can see it is extremely important to keep the appraised value up to date if you choose a stated value insurance policy.

An actual cash value differs since as the name of the policy suggest, the actual cash value of the replacement for the vehicle is considered the maximum amount of the policy.  Of course, it is important to have quality documentation and an acceptable appraisal to establish the policy and to provide proof of value should the vehicle be stolen or damaged.  Keep the appraisal current, since it will be needed should a claim against the policy be required.  An actual cash value policy for a classic car seems to make the most sense since the actual value of the car will be paid in the event of a claim even if it is higher than when the policy was originally established.  In addition, this type of policy is typically (but not always) cheaper than a stated value policy.  Make sure to read all of the fine print and restrictions before selecting this type of coverage since some insurance companies may exclude certain types of claims such as because of a result of loss from a flood or hurricane.

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