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Classic Car Insurance: How to Protect Your Vintage Vehicle

If you have a classic car, chances are you've invested a lot of time and money getting that vehicle restored to its original condition. Doesn't it make sense to protect that investment with classic car insurance tailored to your special needs? In this article, we'll present some important information about classic car insurance and the features you'll need to be sure your vehicle is fully safeguarded.

So, how do you know whether you qualify for classic car insurance? According the Classic Car Club of America, a classic car is a "distinctive automobile, either American or foreign built, produced between 1925 and 1948." The definition of a classic car is often hotly debated among those who own and restore them. Some feel that there are even "modern" classics from the 1950's on. Even an 80's car like the DeLorean can be seen as a classic.

Here's are some critical components of classic car insurance: Agreed value is the amount you will receive if your car is totaled or stolen. Many insurance companies do not offer this type of classic car insurance, so you might have to do a lot of searching to find a policy. This clause in a classic car insurance policy assures that you will receive the full market value of your vehicle and not just an arbitrary amount assigned by the classic car insurance company. The process of arriving at an agreed value is almost like a negotiation between you and the insurance company or agent. For example, if you add enhancements to your classic car that increase its value, there should be a mechanism in your policy, such as an endorsement, to increase the amount of classic car insurance coverage. It's important to remember that since classic cars tend to increase in value, the agreed value should always be reviewed and/or increased when it's time to renew your classic car insurance policy.

Related to agreed value is the concept of actual cash value. This means that the insurance company will determine the amount to be paid to you in case of a total loss. An insurance adjuster will evaluate your classic car and decide what it's worth. This process doesn't really allow for input by you, the owner, so the amount is usually far less than the car's true market value. And since there's no mechanism to protest the insurance company's decision, you may need to hire a lawyer to represent your interests. Actual cash value is not the same as replacement value. Replacement value does not consider depreciation, but actual cash value does. So, actual cash value is equal to the replacement cost minus any depreciation as defined by your insurance company. As you can imagine, it's practically impossible to calculate depreciation on a classic car that might be decades old when.

A third way to value classic car insurance coverage is via a stated amount. In this type of valuation, there is a set amount above which the insurance company will not pay. With stated amount coverage it's possible that if your car is totaled and the stated amount in your policy is less than the car's market value, you'll be out an amount equal to the difference between the car's market value and the stated amount in your classic car insurance policy.

Collectible cars can have specialized and unique equipment like the convertible hardtop found on the 1957 Ford Fairlane 500 Skyliner. If your classic car has features that aren't found on modern cars, be sure your classic car insurance policy covers it. There's plenty of information about classic car insurance available, either via contacting insurance companies directly or doing research on the Internet. A good starting place is to contact your current automobile insurance company to see if they offer coverage for your classic. You may even qualify for a multi-car discount on your insurance premium. If your current insurance carrier can't help you, then it's best to go with a company that has lots of experience insuring classic cars, and, more importantly, paying claims in a reasonable and timely way.

Classic car insurance should provide good coverage for a reasonable premium. Be sure you understand all the terms and conditions before signing on the dotted line.

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