Collector Car Insurance
Although a collector car often has greatly increased value, it is still a car and if it is operated on the roads, it must be insured. What is the value of Collector Car Insurance?
It is possible to insurer you valuable collector car, or indeed your whole collection of classic or antique cars, with any insurance provider. As long as the car is going to be properly registered and driven on the open roads, it is still just a vehicle and can be underwritten for both comprehensive and liability insurance. There are some companies that offer what is called Collector Car Insurance. Why is this necessary and what are the advantages or disadvantages of specific Collector Car Insurance?
The very first issue has to do with cost. It is going to be a pretty safe bet that standard insurance on a valuable collector car is going to cost a bit more. Why is this so? The main reason has to do with the idea that a collector car is something different. It is not going to be used as a regular vehicle even if it is driven. Collector Car Insurance recognizes this unique function. This is reflected in a “miles driven annually” limitation written into the Collector Car Insurance policy. The limit might be 2,500 per year and it might specify that the car will not be driven for daily work commutes.
This restriction might seem harsh, but if the automobile is used as a regular transportation, it really should be covered under a standard policy despite the higher premium cost. Most collectors will be quite content with the limitations since they do not intend to use their prized vehicles as basic transportation anyway. Valuation also has a role in most Collector Car Insurance policies. There are three ways that a vehicle is normally valued. They are book value, accepted value, and agreed value. Each is a bit different idea.
Book value is what is normally used. It assigns a certain value to the vehicle based on actual sales transactions. It starts at its full new car price and declines steadily. This is why insurance on an old car is less expensive than a new one. However, with a rare or collectible car, there is an accepted value. This is often higher than the new car price reflecting an increase in value due to rarity. This value is subject to an underwriter’s estimate of the “actual” or “accepted” value of the collector car.
The agreed value represents, basically, what the owner feels the car is worth. He sets the value by whatever standards he selects. This standard might be his own love of the vehicle or his knowledge that it would be impossible to replace. Whatever, he sets as the value; the insurance company will agree to and structure the premium accordingly. Another advantage of Collector Car Insurance is the fact that, in the case of collections, liability coverage is charged for only once. This liability is usually low anyway because of the miles limitations.