A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Written by Laura Berry
Former Insurance Agent Laura Berry

Melanie Musson is the fourth generation in her family to work in the insurance industry. She grew up with insurance talk as part of her everyday conversation and has studied to gain an in-depth knowledge of state-specific insurance laws and dynamics as well as a broad understanding of how insurance fits into every person’s life, from budgets to coverage levels. Through her years working in th...

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Reviewed by Melanie Musson
Published Insurance Expert Melanie Musson

UPDATED: Apr 1, 2021

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For most people, cars are just a way to get from one place to another. For others, cars can be a passion and a collector’s item. For people who appreciate cars as more than mere transportation, car collecting and restoring can be a very valuable and rewarding hobby.

Although restoring a classic car is a labor of love, a properly restored collector’s car can be worth a substantial sum of money. Due to their rarity, antique cars and other types of collectible automobiles are very valuable. In order to protect the time, effort and value put into these cars, it’s important to insure them with appropriate insurance.

What is a Collector Car?

While someone can collect any type of car, the primary types of collector cars are antiques, rare models and heavily-modified “hot rods.” A vehicle can be classified as an antique once it’s over 20 years old, but most of the best-known antique cars are much older, usually from the 1950s, ’60s and ’70s.

Rare vehicles may also be collector’s cars and they might require unique insurance. For example, a car may be a prototype that was released in only a limited number. If only a few hundred vehicles were ever released, the car will be worth a substantial sum. Of course, because all of this model of car will be equally rare, the value will remain high and a collector policy may not be necessary.

Do I Need Insurance On My Collector Car?

If the vehicle is merely a show piece that is never driven, you may not need to carry insurance on it. If the vehicle is ever driven on public roads, however, you will need to maintain at least basic liability insurance. It may also be a good idea to purchase at least comprehensive coverage on the vehicle to help protect it from vandalism, theft and weather events. If you drive the vehicle frequently, collision coverage is also a good choice.

While the vehicle is being restored, you may not wish to carry as much coverage as you will once the restoration is complete. If the vehicle cannot be driven at all during the restoration, you can talk with the insurance company about putting a comprehensive-only policy on the car; this will keep costs low throughout the restoration while still providing a small amount of protection against possible damage.

The Difference Between Collector Insurance and Regular Coverage

Collector’s items are worth more than their retail value. This is true of toys, antiques, cars and anything else that people may choose to collect. What makes a collectible valuable is its rarity, condition and its appeal to other collectors. When it comes to insuring collectible items, it’s important to insure the item at the appraised worth rather than the market price.

Standard auto insurance companies will insure a vehicle at its market value, disregarding its appraisal value. This means that the car’s worth will be calculated based on what the market value of any car of that same year, make and model is, regardless of its condition. Damage might be taken off the vehicle’s value as depreciation, but significant improvements from restoration may not count toward increasing the car’s value.

Because the vehicle is not insured at its true worth, the insurance company will not pay an appropriate settlement. For older cars, the vehicle may be worth essentially nothing. This means that if the vehicle sustains damage, the insurance company may wish to declare it a total loss, even if the damage is minor and the vehicle is fully restored.

In order to prevent this from happening, car collectors must purchase collector’s coverage. This type of policy is available from many insurers, including large companies and smaller niche companies that specialize in collector car coverage.

How Collector Car Insurance Works

In order to obtain a collector car policy, you will need to get the vehicle appraised. This appraisal will provide the vehicle’s value to the insurance company and will serve as the maximum amount that the insurer will pay for a claim to the car. In some cases, the insurance company will require an adjuster to look at the vehicle prior to insuring to to ensure that the appraisal is accurate.

Once the vehicle has been appraised, the insurance company may have further stipulations about how the vehicle can be used or what coverage it can carry. For example, the insurance company may require that the vehicle stay below a certain annual mileage. They may also require that the vehicle be stored or transported in certain ways. Each insurance company will handle this differently, so it’s a good idea to check with the insurer when obtaining your policy so that you are prepared.

Collector car coverage is often more affordable than standard insurance because collector’s cars pose little risk to insurers. The insurance company expects the vehicle’s owner to be very careful with the vehicle, so damage claims are much more rare for these vehicles than cars that are used regularly as commuter cars. This ensures a wide profit margin for the insurance company, allowing insurers to keep the premiums low.

If you need to purchase insurance for a collector car, the best way to find a policy is to search online. When you fill out a quote online, you can enter the vehicle’s year, make and model. If the car is old enough to be a classic, you should immediately be matched with insurers that can provide coverage to that type of car. Otherwise, you may need to manually search for companies that insure collector cars. Either way, by searching online you can see the widest variety of companies that can provide the coverage that you need at the best price.