Classic Car Insurance: What Is It? How Does It Work?

Classic car insurance provides specialized coverage options and expert service tailored to the needs of classic car owners, which may not be available from a regular car insurance company.

The most important feature of a classic car insurance policy is agreed value coverage, which means you and your insurer agree on the value of your car based on an appraisal. Many classic car insurers also offer special coverages for things like displaying your vehicle at car shows, as well as having expertise in the repair of exotic vehicles.

However, using classic car insurance may come with drawbacks, such as mileage limits, and only certain cars are eligible for a classic car insurance policy.

What is classic car insurance?

There are several services and features that distinguish classic car insurance from an average insurance policy, but the most important one is agreed value coverage.

In an agreed value policy, you and your insurer agree on the value of the car you own, and that's how much it's insured for. This could be anywhere from $10,000 to $100,000 or more — it's all dependent on what your classic car is worth, as determined by an appraiser.

This is in contrast to the way typical cars are insured. If you have a commonly available car, your insurer will determine its value based on comparable models and the cost to repair it. In this way, a classic car is insured more like a piece of art than a normal motor vehicle because its worth is based on whatever buyers are willing to pay.

Also unlike typical car insurance, the maximum payout on an agreed value policy won't decrease over time. Typical cars depreciate in value: A 2010 Toyota Corolla is worth less now than it was in 2015, so the maximum payout you can receive may change, too.

On the other hand, the value of a classic car might stay the same or even increase over the same period: A 1970 Dodge Challenger in good condition might have been worth $30,000 five years ago, and the same amount today. You'll have to manually adjust the coverage amount of your policy based on the changing value of your car.

Other benefits of classic car insurance

The other main benefit of classic car insurance is that these companies specialize in working with rare, collector or antique cars. The agents, adjusters and other staff you'll interact with when you have a classic car policy will be familiar with the ins and outs of a rare car, and more knowledgeable about the needs of a classic car owner.

Further specialized coverages include:

Classic car insurance companies will also provide the most common car insurance coverages such as liability, personal injury protection and uninsured motorist coverage, as well as comprehensive and collision coverage.

Drawbacks of a classic car insurance policy

Because classic car insurance is designed for rare or high-value cars, there are some shortcomings compared to buying a policy from a mainstream insurance company. You won't encounter these drawbacks at every classic car insurer, though, so make sure to compare offerings at multiple insurers to find the best one for you.

Eligibility for classic car insurance

Classic car insurance isn't designed for cars you use on a daily basis or run-of-the-mill vehicles like a recent Toyota or Volkswagen. Classic car insurers usually require that there's something special about the vehicle, such as advanced age, high value or some customization.

In general, your car must fall into at least one of the following categories:

It's also likely that your vehicle will need to meet all of the following requirements in order to qualify:

Driver eligibility

Additionally, there are usually qualifications that you, the owner of the car, must meet. These vary by insurer, but typically you must:

Collectible car types

Classic car insurance is also available for antique, exotic, custom or historic cars, and the benefits and drawbacks tend to be similar, though which types of vehicle are eligible for coverage may vary by provider.

While most collectible automobile insurance policies are relatively similar, the way carriers classify different types of collectible vehicles, including some types they exclude coverage for, is important to understand. Although definitions, years and descriptions can vary from insurer to insurer and state to state, the most common collectible auto categories are below. We generally will use classic and collector car insurance interchangeably for the purposes of simplicity.

Insurers for classic cars

Many well-known insurers — including State Farm, Progressive, Farmers, Safeco, Geico and Esurance — as well as specialty carriers (many of which underwrite for the aforementioned companies), like Hagerty, J.C. Taylor, Condon Skelly, Grundy and American National, offer coverage for collectible vehicles. A good place to start your search for the right provider is with your existing auto insurance carrier, which may be able to kick in a discount for insuring multiple vehicles.

See our full breakdown of the best classic car insurers.

Classic car insurers

Cost of collector insurance and available discounts

Coverage for collectible vehicles is almost always less expensive than conventional automobile insurance due to the fact that you drive much fewer miles every year and you are likely to keep the vehicle sheltered and in good condition. Nevertheless, the cost of classic or collector insurance is calculated similarly to common auto insurance.

"Collector car insurance is generally very affordable, possibly costing around one-third of what you might pay for regular auto insurance," said Kristofer Kirchen, president of Tampa, Fla.-based Advanced Insurance Managers LLC.

Car insurance discounts available to standard auto policies also apply to collectible car insurance, varying by the insurer. Some circumstances that may allow you to be qualified for a discount include: