Classic, antique, modified or just plain old?

By Ryan Hurlbert on October 22nd, 2010
Auto Insurance

Is your special ride considered classic, antique, vintage, collectible, modified, or simply old? That depends on whom you talk to.

How old is old?

The Classic Car Club of America defines a classic car as one built between 1925 and 1948 that was fine and distinctive when new. The Antique Automobile Club of America (AACA) considers any roadworthy car at least 25 years old to be eligible for judging at AACA National Meets. The state of Texas will register your car as an antique when it is 25 years old, while California doesn't consider your car an antique until it is at least 39 years old. And some DMVs only offer antique status to a vehicle that is a collector car that is only used in parades, shows, and club events.

Confused yet?

Hot rods and modified cars only add to the confusion. A stock 1932 Ford coupe may be a classic, but put a non-production motor in it and modify the body, and your insurance company may consider it a modified car and not cover it at all. Some states have specific registration policies for modified cars, such as special serial number inspections and safety checks. In Texas, for substantially modified or kit cars, you'll need to provide pencil rubbings of all body, frame and engine serial number stampings.

So whose definition do you use?

For registration and insurance purposes, the definitions provided by your state's DMV and your insurance company are the only ones that matter, and they vary considerably from state to state. Depending on where you garage the car, the DMV may discount renewal fees and waive emission control inspections for antique, classic or vintage cars. Check with your state DMV office for the rules that apply to you and your vehicle.

Your insurance company may offer you lower premiums for antique or classic cars if they are rarely driven and securely garaged. Some insurance companies refuse to cover modified vehicles at all.

How to choose the right coverage

Any modifications can affect the premiums and auto insurance coverage for your vehicle. The $5,000 wheels you put on your car are not covered unless you notify your company that they are on the car and pay the additional premiums. Special paint jobs, sound systems and body kits have to be listed on the policy to be covered. Be sure to disclose all such modifications to your agent when you are getting a quote or purchasing a policy. Some auto insurance companies have restrictions on the amount of coverage they provide for modifications, and you don't want to be caught short when you file a claim.

Some cars, no matter what their age, are simply not rare enough, unique enough, or cool enough to be anything but old. You might have the nicest 1980 Chevrolet Citation ever, but it is still just a 1980 Chevrolet Citation! Your insurance company might allow you to insure it as a classic, but there isn't likely to be a benefit for doing so because the value will not appreciably increase with the vehicle's age or condition.

Types of classic car insurance

There are three types of insurance policies for covering comprehensive and collision losses on a classic, antique or modified car: standard actual cash value, stated value, and agreed value.

  • Standard actual cash value (ACV) policy - ACV is defined as "replacement less depreciation" and is based on a standard vehicle in normal condition for its age. A standard ACV auto insurance policy will not recognize the increased value of your collectible, classic or modified vehicle, and will only pay losses based on ACV. Your fully restored 1968 Camaro is obviously worth more than one that shows all of its 42 years, and should be insured accordingly if you want to protect its value. This policy type is fine for cars that are simply old, but does not provide enough protection for more valuable vehicles.
  • Stated value policy - A stated value policy lets you state a maximum value for your vehicle, but it is a cap: Your insurance company only has to pay up to that amount, but can pay you less if they determine the ACV of your car is lower. Not long ago, American muscle cars were bringing big money at auctions around the country. Then the economy crashed, and values fell with it. Say you spent $80,000 on a car, and insured it for a stated value of $80,000. If the value of the car at the time of loss was $50,000, you would receive only $50,000--better than ACV of a standard car of its age, but a long way from what you invested.
  • Agreed value policy - An agreed value policy protects you against drops in value or depreciation. You and your insurance company agree on a value for your car at the time the policy goes into effect. If you suffer a total loss, you are paid the agreed value. Be sure to adjust the agreed value upward at each renewal to reflect any appreciation in your car's value.

How to establish agreed value

A moral hazard is a situation that encourages loss, such as insuring your 1980 Chevrolet Citation for $30,000 on an agreed value policy. Obviously this car is worth nowhere near this amount, and by covering it for that amount your insurance company would be inviting a claim. This is why your insurance company negotiates the value of a car when an agreed value policy is purchase.

Be prepared to justify the value you wish to insure the car for with appraisals, auction results and market reports. Keep in mind that the cost of the restoration work you did or have done does not necessarily equal the value--the world is full of $100,000 cars that have had $300,000 worth of restorations. Save your receipts and document the work, but don't expect a dollar-for-dollar value add. But sometimes, if the car is special enough, the restoration worth can be more than the sum of its parts.

How to choose classic car insurance

When shopping for insurance for your older ride, whether it is classic, antique, vintage, collectible, modified or simply old, pay attention to:

  • Mileage restrictions: Some policies limit you to just 2,500 miles a year, others twice that or more.
  • Use restrictions: If your policy restricts you to parades and car shows, it won't cover a Sunday drive around the neighborhood.
  • Vehicle type: Your insurance company may cover classics, but not hot rods or modified vehicles. Make sure you and your insurer agree on what you are insuring.
  • Determination of value at time of loss: ACV, stated value, or agreed value all provide different levels of protection. Know what you are paying for.

You need the right auto insurance coverage to protect your special ride. Follow these tips and shop around for the best classic car insurance value.

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