Classic Car Insurance: Some Extra Features to Consider

There's nothing like a bright summer day and a ride in your classic car. Whether you bought it already restored or spent years putting it back into mint condition, it only makes sense to be sure your classic car insurance has features that will help you preserve its value in the event it ever needs extensive repairs due to accident, theft or vandalism.

One important factor to consider when purchasing classic car insurance is inflation. Investopedia defines inflation as "a sustained increase in the general level of prices for goods and services. It is measured as an annual percentage increase. As inflation rises, every dollar you own buys a smaller percentage of a good or service." The prices of classic cars are not immune to inflation: they go up every year, just like everything else. Although this is a good thing for classic car owners, they need to make sure that their classic car insurance keeps pace with inflation. A good classic car insurance policy will adjust for inflation on a quarterly basis. For example, a classic car insurance policy that's capped for an annual inflation rate of 8% would adjust on a quarterly basis of 2%. Before you get upset about rising premiums for classic car insurance, remember that your vehicle's replacement cost (also known as actual cash value) is also going up over time. The percentage increase in your car's value is often much greater than the percentage increase in your classic car insurance premium.

Owners of classic cars often collect classic car parts as well. Having spare parts on hand make it easier to fix the vehicle and get it back on the road in a timely manner. Classic car parts aren't easy to find and often are expensive. In some cases, they're irreplaceable. Over time, owners can have hundreds of dollars tied up in spare parts. If this is your case, look for a classic car insurance policy that includes spare parts coverage. Although this coverage is a fixed amount like $250 or $500, it may come in handy if some or all of your spare parts are lost, stolen or damaged.

You should also try to find classic car insurance with a zero or low deductible. The insurance industry defines a deductible as a "clause in an insurance policy that exempts the insurer from paying an initial specified amount in the event that the insured sustains a loss." What this means is that if your car needs repairs, you will have to pay some of the cost. This can be a significant amount, sometimes as high as $500. Although it's possible to find classic car insurance with a lower deductible, chances are the premium will be higher. .

Flexible usage is another feature to look for. Inexpensive classic car insurance may severely restrict the vehicle's usage, to, for example, parades and shows. Although most classic car insurance won't cover you for unlimited mileage, you should be able to find a policy that will allow something like 2,500 or 5,000 miles per year, enough to get you back and forth from a few shows and events.

Another nice feature to look for is coverage if you acquire another classic car. There's often a time restriction on this coverage, usually 30 days. And you can expect a cap on coverage. This can be variable, but $25,000 is a typical amount. If you're always adding cars to your collection or transporting new acquisitions to your home location, look for a policy that provides automatic coverage for a set amount of time, usually 30 days.

A note on valuation: Valuation is often a problem for classic cars. Be sure your classic car insurance uses a reliable method of valuation and not just some arbitrary number. Once you have a fair valuation, it's important to keep track of what you do to increase the car's value.

Even if you do a lot of the work on the car yourself, be sure to keep all the receipts for parts you buy. For work done in auto repair shops or by restorers, collect as much documentation of this work as possible.

Classic car insurance is an important aspect of owning a piece of automotive history. Just make sure your vehicle has the right coverage.