Do I need liability insurance on a collector car?
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UPDATED: Apr 8, 2020
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For many people, restoring a collector’s vehicle is a fun and challenging hobby. For others, it can be a powerful status symbol or just a way to get a great-looking car. Whatever the purpose of the vehicle, it’s important to carry an appropriate amount of insurance on a collector’s car. Antique cars have special needs and cannot be insured properly with regular policy.
One question many individuals ask is if it’s necessary to purchase liability insurance on a collector car. There is no simple answer to this question, as it depends upon the specific situation. Here are a few guidelines to help you decide:
Is the vehicle fully restored?
If the vehicle is still in the process of being restored and is not being driven, it probably does not need liability insurance. There is some small likelihood of the vehicle causing damage to another person’s property without being driven, however. The vehicle could start a fire that spreads to adjacent property, or it might slip out of gear and roll into a neighbor’s car.
Is the vehicle being driven at all?
If the car is driven even occasionally, it needs liability insurance. Even if the car is only driven to shows a few times a year, it still has a possibility of being involved in a collision and thus it is legally required to have liability insurance. If the vehicle remains in storage only and is towed to shows, it may not require liability insurance.
Does state law require it to be insured?
Some places will allow antique vehicles to be registered without being insured. There will be limitations to this type of registration and the vehicle will get special license plates to signify this as well. Nevertheless, just because a vehicle is registered does not mean it can be driven legally; it is still a requirement to carry liability insurance while driving a car.
In addition to liability insurance, some owners of collectible cars also choose to maintain collision and comprehensive coverage on the vehicle. This helps to pay for any damage the car sustains once it has been restored. If nothing else, it’s a good idea to maintain comprehensive coverage on a classic car. This will protect the vehicle from weather, theft and vandalism.
Stated Value Insurance
Take care that the vehicle is insured under a stated value policy, however, and not a regular insurance policy; otherwise, the company will insure the vehicle at its market value, which will be substantially lower than the true value of a fully-restored classic car. If any damage were to occur to a classic car, the insurance company would only pay up to the vehicle’s market value; this would likely lead to a substantial loss of money on part of the insured.
Fortunately, many car insurance companies offer insurance for rare, exotic and collectible cars. These policies take into account the low mileage and high value of the vehicle and insure them at their worth while remaining affordable. In order to obtain this type of policy, you must first have the vehicle appraised. The appraisal value will be the policy limit, so be sure to get as accurate of an appraisal as possible.
Some limitations may be placed on what type of car can be insured with a stated-value insurance policy. The car may need to be over a certain age in order to qualify. Be sure to check with the company before purchasing the policy so you can be sure the policy will cover everything you need it to for a price that fits within your budget.
Because collector’s cars pose a very small risk to insurance companies, these policies are usually more affordable than regular liability insurance policies for newer cars. Collectors may be required to keep the vehicle’s annual mileage under a certain figure in order to maintain this type of policy, and the vehicle may need to be periodically appraised to confirm its value.
You can search online specifically for companies that offer coverage for classic cars in order to find affordable insurance. Once you’ve found a company you’d like, you can contact an agent or the customer service number in order to finalize the policy details and secure an accurate quote.