Classic Car Insurance: Why It Matters

Classic car insurance is a must for any collector vehicle owner. Quite often classic cars are still insured by standard insurance companies, which may leave your prized ride seriously underinsured. You may be receiving a multi vehicle discount with your daily drivers, however you may be snagged with issues tied to the difference regular insurance companies and collector vehicle insurance companies value the vehicles

The Problem with Standard Insurance

Many owners believe their regular car insurance provider will offer the best deal for their classic, especially if they already insure other vehicles. But most standard providers lack the experience and tools to accurately value collector cars, often leaving you with inadequate coverage at a higher premium.

Types of Insurance Coverage for Classic Cars

1. Actual Cash Value (ACV) – Avoid at All Costs

ACV is what most daily drivers are insured under — and it’s the worst option for a classic car. It pays based on depreciated value or what you paid, not its real collector worth. For example, if you bought a 1969 Pontiac GTO in 1990 for $15,000, ACV might still only pay $15,000 (or less) if totaled, even though its current value could be $60,000 or more.

2. Stated Value

Stated value allows you to suggest a value higher than the book value. However, insurers may still deduct for depreciation or fine print limitations. There’s also typically a deductible. It’s better than ACV, but still not perfect.

3. Agreed Value – Best for Classic Cars

This is the gold standard. You and the insurer agree on the car’s value upfront, and that’s exactly what you’re paid if it’s totaled — with no depreciation and usually no deductible. It’s the most secure way to insure a classic or collector car.

Insurance for Hot Rods & Custom Builds

Hot rods and custom cars are also insurable through specialty companies, though extra documentation is usually required. Keep receipts, labor estimates, and photos. Insurers may assign extra value for cars built by notable builders or with rare components. A proper paper trail will help prove your vehicle’s value.

Common Collector Car Insurance Limitations

  • Mileage Restrictions: Policies often limit mileage to around 250 miles/month or 2,500 miles/year. Some require odometer checks, though mileage-free plans are available.
  • Age Restrictions: Drivers typically must be 25 or older. Some policies require a clean 10-year driving record.
  • Garage Requirement: Most insurers require vehicles to be garaged. Frankly, they should be.
  • Extra Vehicles: You'll need to prove you have another vehicle for daily use. Some policies require one per licensed driver in your household.

Putting a Value on Your Classic Car

Classic cars with original parts are easier to value using price guides. For customs or restorations, insurers look at receipts, part quality, labor costs, and restoration details. Keep everything documented. Certified appraisals help but may not be required if your paperwork is solid. Updated photos are also smart to keep on file.

Ways to Save on Classic Car Insurance

Because classic car premiums are already low, you may not be able to “drop coverage” during off-seasons. However, if your car is mid-restoration or off the road, talk to your insurer. Some will offer reduced coverage options. Another big perk? Many companies let you insure multiple classic vehicles under one premium since you can only drive one at a time.

Review Your Coverage Regularly

Classic car values continue to rise. If your vehicle was recently restored or has appreciated, it’s time to increase coverage. Don’t let outdated numbers leave you underinsured in the event of a loss.

Final Thoughts: Go with a Collector Car Specialist

If you take one thing away from this guide, it's this: don’t insure your classic car with a standard insurance company, if it has any true value. Collector car insurance specialists offer better protection, more accurate value coverage, and often lower premiums )sometimes up to 50% less). Most importantly, they understand the passion behind your classic and insure it for what it’s truly worth.