Learning about the differences between a standard auto insurance policy, and the type of policy that is necessary when insuring a classic car, will be helpful to you, so that you are aware of the limitations associated with insuring classic vehicles. You must first ascertain whether your car qualifies under the classification of ‘classic’. Not every insurer will agree on the definition of a classic car, so it is important for you to talk to your agent to be sure that the company will consider your vehicle a classic car.
In most cases, insurers will include classic cars on standard vehicle coverage, but this route usually comes with very high premiums. Also, you will not benefit from what is the biggest advantage of buying specialist insurance, which is the agreed value clause (or the minimum amount that will be paid to you should your car be stolen or involved in an accident or stolen).
Mainstream insurers will look at current market prices to determine how much to pay you in the event of you making a claim. But this can be difficult when it comes to classic cars, as it is not so simple to figure out their market value. 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.
One of the most price-sensitive markets is the one for classic cars; in fact, the value for the same model car can range from 50% to 500%. 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. Remember that most insurance companies, especially mainstream ones, will look to pay you as little as they possibly can.
If you want to have an agreed value clause included in your classic car insurance policy, you will probably have to follow some rigid insurance guidelines. A yearly mileage maximum is one such rule, as it is expected that a classic car will be driven less, and the classic car insurance policy will reflect this guideline. 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.
These restrictions that are associated with classic car insurance policies, will generally allow these types of policies to be reasonably priced, but you should expect to pay a higher rate if your vehicle is a model that is considered very rare and in demand. 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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