Insuring a Classic Auto
Items to consider when shopping for Classic Auto, Classic Car, Antique Car, Custom Auto or Classic Car Insurance.
- How much liability insurance do you recommend?
- If I am involved in an accident, will my insurance premium increase?
- Do you recommend custom parts and equipment (CPE) insurance for my particular car?
- Is there a limit to the number of miles I can drive on my insurance policy?
When shopping, be aware that the more coverage you purchase, the higher your annual premium will be, however it costs less to maintain an insurance policy than to pay for repair and custom part expenses out-of-pocket.
Required Liability Insurance for Automobiles
The amount of liability insurance you need depends on many things―is your car a classic, an antique or a show car, is it stored inside or outdoors and how many miles do you drive it per year, you should always consider purchasing more insurance coverage than the required state minimum.
As an example, if you live in New Jersey, the minimum requirement for liability insurance is $15,000 in bodily injury coverage and $5,000 in property damage coverage, this minimum amount will not even be close to enough to cover your expenses in the event of a serious accident.
Insurance professionals recommend carrying at least $300,000 in bodily injury protection, and $100,000 in property damage protection.
Additional Types of Classic Car Insurance
There are other types of coverage available for classic car insurance policies:
- Collision insurance
- Comprehensive insurance
- Uninsured/Underinsured motorist coverage
- No fault coverage
- Personal Injury Protection (PIP) coverage
Collision coverage covers damages to your motorcycle caused by collisions with another object―be it another vehicle, mailbox, or various other stationary object
Comprehensive automobile insurance covers the cost of damages due to vandalism, theft, and natural disasters such fire or flood.
No fault and PIP insurance covers you in the event of an accident in which no fault is determined, and uninsured or underinsured motorist insurance covers you in the event of an accident with an underinsured driver. For example, if you are involved in an accident that places you in the hospital for several days, totaling 100,000 in medical bills, your PIP or underinsured motorist insurance will cover any expense not covered by the other driver’s liability insurance policy.
Collision and CPE Insurance for Classic Motorcycles
Typically you may not need collision insurance, as replacement parts for classic automobiles are comparatively inexpensive. What you will want to consider is accessory or custom parts and equipment (CPE) coverage. The purpose of CPE coverage is to cover damages to custom parts and accessories added after the vehicle left the factory floor. The majority of collision and comprehensive insurance policies include a certain amount of CPE, you might consider purchasing additional CPE for custom or show cars with extensive accessories. That way, in the event of theft or a total loss accident, you will be compensated for all automobile accessories, in addition to car itself.
For example, if your standard classic car collision insurance policy provides $1,000 CPE coverage, but the cost of your accessories totals $5,000, purchasing an additional $4,000 in CPE coverage is advisable.
Some examples of motorcycle accessories include, but are not limited to:
- Special roofs and deluxe roof treatment
- All custom paint work and deluxe exterior
- Chrome and reverse chrome
- Alloy or magnesium wheels/wheel covers, aluminum wheels or wire-spoke wheels
- Special tires
- Chrome engine accessories
- Racing slicks, oversize tires or custom wide-tread tires
- Camper tops, T-Bar roof and T-tops including glass
- TV, VCR or DVD players that are permanently installed in the vehicle
- Anti-theft equipment not installed by the auto manufacturer
- Aftermarket racing seats or leather seats not installed by the auto manufacturer
- Alcohol detection systems that are not permanently installed
Examples of unacceptable custom equipment:
- TVs, radios and CD players and similar electronic devices that are not permanently installed in the vehicle
- Radar detectors
- Tapes, CDs and containers used to store them
- CB radios, telephones or two-way mobile radios that are not permanently installed in the vehicle
- Alcohol detection systems that are not permanently installed
Special manufacturer trim packages, such as special editions, sport packages or packages featuring specific designers or outdoor outfitters are not considered additional equipment.
Please note: We recommended you take photos of the custom parts and equipment installed in or on your vehicle and save all your receipts.
Who Needs Collision Insurance?
If your classic car is worth more than it would probably cost to repair it, you should consider purchasing collision coverage. On the other hand, if your classic car is worth less than what it would cost to repair―in which it would be considered a total loss in an accident―you probably don’t need collision insurance.
For example, if your classic auto is worth $1,000 but it would take $1,500 to repair damage to the vehicle body, your insurance company will only compensate you for what the vehicle is worth, and collision insurance is superfluous.
However, if you own a new or highly customized bike with a Kelley Blue Book value of $15,000 or more, it will likely cost less to repair the bike than the bike is worth, and collision insurance will cover the cost of repairs.
Know Your Custom Car/Classic Car Worth
It is important to know what your vehicle is worth, and to be aware of the worth changing with time or with the addition of customized parts. You can access the Kelley Blue Book online for many vehicles. Note that for custom and classic cars, you should contact your insurance agency directly for estimated worth.
Consider Comprehensive Classic Car Insurance
You might also consider comprehensive insurance for your classic car. Unlike collision insurance―which covers damages due to collisions only―comprehensive insurance covers damages due to theft, vandalism, natural disasters, and weather conditions, such as hail, fire, and flood. The majority of comprehensive insurance policies include a certain amount of coverage for motorcycle accessories and custom parts, but you do have the option to purchase more than the minimum amount.
Classic Car Insurance Settlement Types
In the event of theft or a total loss accident, you will be offered a loss settlement. The type of settlement you are offered depends on the type of vehicle you own.
For example, if you owned a fairly new vehicle―such as a Ford Escape or Toyota Prius―you will typically be offered a settlement for the actual cash value (ACV). This means in the event of a total loss accident, you will compensated for the Kelley Blue Book value of the vehicle, minus the deductible. If you purchased additional accessory coverage, you will be compensated for your accessories.
If you own a classic car―such as an 1956 Ford Thunderbird or 1968 Chevrolet Camaro―typically you will be offered a settlement for the agreed value or stated amount.
The stated amount represents the value of the vehicle as stated by the automobile owner at the time of policy purchase, and the agreed value is the value of the vehicle as agreed upon by you and your insurance company when the policy is written.
*Any custom equipment or accessories added after the policy is written will only be covered by CPE insurance.