As the economy continues to pick up steam, so too has the classic car market shifted into a higher gear. Premium priced vintage models are fetching record prices and are becoming a solid investment. And as the classic car market has rebounded, so has the market for insuring them.
"Classic collector car policy covers agreed value, so you know exactly what you're going to get paid," said Jim Fisk, U.S. marketing manager for Chubb Insurance, which provides coverage for classic cars. "There is generally no deductible. With the better policies, there is no annual mileage limit. So you are allowed to use your car with a great deal of freedom."
Chubb recently held a classic car show in the parking lot of its Whitehouse Station, N.J., location, where Fisk said there are some very unique challenges when it comes to writing coverage for classic cars.
"The biggest challenge is to try to differentiate between true car enthusiasts and people who are looking for low-priced insurance," he said. "Because collector car insurance generally runs about 60% lower than private passenger policies, there are a lot of folks that see it as a potential solution to save money purely. When, in fact, we want folks that use their cars, appreciate their cars, drive them, but also have a standard-use vehicle for daily driving."
Jeff Walker, senior collector vehicle insurance specialist at Chubb, said the major difference between an ordinary automobile policy and one for a classic car is one of agreed value.
"With agreed value, that means that the insured can ask to value their car at whatever value they really desire, as long as it does fall within the market," Walker said. "The big difference is that, when you get involved in an accident with regular insurance, your insurance carrier is only going to give you the current market value for that car, so, whatever has depreciated over the course of the policy term. With collector car insurance, we guarantee to hold the value of the vehicle for the policy term. So, if you have a $50,000 vehicle and that vehicle get stolen, you're going to get $50,000 from us."
Classic car insurance is typically about one third of the cost of regular auto insurance, Walker said. "You can expect to pay a significant amount less for the vehicles, because obviously they are driven less and they're not used like a regular vehicle," he said. "They live in a garage. The owners typically care more about their cars than some of their family members."
As for claims, they usually come from an incident at a car show or are weather-related and are rarely the result of a highway mishap.