The art of insuring a classic car
Whether you drive a mint condition MGB, a cute and curvy 1955 Beetle or a cooler-than-cool E-type Jaguar getting the right insurance to cover your pride and joy is vital.
However, insuring a classic or vintage car is not as black and white as insuring a more standard vehicle, so it’s important to understand how the policies differ and what restrictions to watch out for.
The first thing to consider is whether your vehicle is classified as ‘classic’. This is, admittedly, a loose term but generally speaking it can be broken down to vintage cars (circa 1900 to the 1930s) and historical cars (made before 1973).
However, Lee Griffin, business development director at Gocompare.com, says different insurers will have different definitions of what can be insured as a classic car.
Knowing how to insure your classic car will largely depend on the way you utilise it. Most insurers will accept older vehicles on their mainstream car insurance policies, but you may face high premiums. In addition, you won’t benefit from what is, arguably, the biggest advantage of buying specialist insurance – the agreed value clause, or the amount that will be paid out should your vehicle be written off in an accident or stolen.
Mainstream insurers will look at current market prices to determine how much to pay out. For classic cars, this could present a problem as determining market value of this type of vehicle is notoriously hard. In many cases, says Griffin, the insurer will end up undervaluing your motor.
An agreed value policy is, therefore, more suitable for older cars as it will take factors such as the condition of the vehicle and its ‘collectable’ value into consideration. You should, however, make sure that the agreed value is guaranteed and, if possible, find out how often the agreed value is reviewed as, clearly, classic car values will change over time.
However, in order to benefit from a classic car insurance policy that includes an agreed value clause, you will have to adhere to strict insurance guidelines. Most classic car insurance policies are aimed at drivers who do not use their cars very much. In most cases, there will be an annual mileage cap – often 3,000 miles.
For this reason, if your classic car is your main vehicle and you do drive more than 3,000 miles a year, then specialist insurance is unlikely to be suitable for you.
“If you drive a 1970s MG, for example, and notch up around 12,000 miles a year, you are unlikely to qualify for classic car insurance,” says Griffin. “However, while mainstream insurance would probably be quite cheap – the main thing you’ll be missing is the agreed guaranteed value benefit.”
Classic car policies are also likely to stipulate that the vehicle is kept locked in a garage whenever it is not in use, rather than parked in a driveway or on the road.
If you intend to take your vehicle to motor shows, then you’ll also need to look out for a policy that allows this, as not all will as standard. Other restrictions might include adding security measures – trackers, alarms or demobilisers, for example – which might not fit with your car, or restricting which garages you can take your motor to.
Because of the restrictions, classic car insurance policies tend to be relatively cheap, says Griffin. However, if your vehicle is a little bit special, or you own a collection of classic cars, you might be tempted to seek out a different type of insurance, says Ashley Cole, head of motor at Hiscox Insurance.
But again, making sure this insurance includes an agreed value is vital for owners of classic cars, simply because market values can vary so dramatically. He gives the example of an E-type Jaguar, which can cost anything from £25,000 to £200,000.
“The classic car market is very price sensitive,” Cole adds. “If you car is in mint condition, is limited edition or has providence – being owned by a 1950s film star, for example – an agreed value policy is a must.”