Classic car insurance

Classic car insurance is an umbrella term that refers to insurance covering collectible cars, which includes what we traditionally consider ‘classic’ cars and extends to other specific categories such as vintage and veteran vehicles. 

While standard car insurance with certain add-ons might sometimes suffice for your collectible car, there are also specialty insurance options designed to meet the unique needs of collectible car owners. 

In this guide, we'll outline the differences between classic, veteran, and vintage cars. Additionally, we'll delve into what sets classic car insurance apart from standard car insurance and highlight key features to look for in a policy.

Classic car insurance and standard car insurance are designed with distinct objectives in mind, catering to the unique requirements of collectible vehicles as opposed to everyday use vehicles. 

Although the foundational coverage—what you're insured against—might share similarities, especially in the realm of comprehensive coverage focused on protecting your car, classic car insurance distinguishes itself with features specifically tailored for collectibles. 

These necessary features might not be as readily available or as extensive in standard policies, even though some overlap exists:

• Agreed value. Included in many standard policies, this coverage is based on a mutual agreement between the insurer and the insured on the car's value, which is particularly important for collectibles that don't depreciate in the same way as regular vehicles.
• Choice of repairer. Gives you the flexibility to choose who repairs your car, an option sometimes available in standard policies but essential for classic cars that may require specialist care.
• Salvage rights. Allows you to retain your vehicle after a total loss, a feature less common in standard policies but often included in classic car insurance, catering to those who may wish to restore their collectible.
• Modifications. Classic car insurance typically covers modifications or restorations without additional endorsements, unlike standard policies, which might not fully cover these unless specified.
• Usage restrictions. Classic car insurance includes specific restrictions on how and when the car can be used, such as prohibiting daily commuting and limiting overall mileage, which can affect premium costs. These restrictions highlight the collectible's role as a hobby or investment rather than a daily driver.
• Lay-up cover. Offers a reduction in premiums during periods when the car is not in use, such as winter storage, by suspending certain coverages while still protecting against risks like theft or damage. This feature is specific to classic car insurance and not typically found in standard policies.

Choosing the right insurance for your classic car involves understanding these key differences and identifying what's most important for your vehicle's protection.

Despite the name ‘classic car insurance,’ this type of insurance doesn't exclusively cover what many might strictly define as ‘classic’ cars. The Australian collectible car market recognises several categories of collectible cars, each distinguished by its own age and era. These are:

• Classic. Vehicles that are 15-20 years old or older are often considered classic. This category captures cars that have begun to capture the hearts of enthusiasts and collectors due to their age, design, or the start of historical significance.
• Vintage. Vehicles built between 1919 and 1930. The vintage classification is reserved for cars from a golden era of automotive innovation and style, reflecting a period of rapid development in car manufacturing and design.
• Veteran. Vehicles built before 1919. Veteran cars are from the earliest days of automotive history, representing the pioneering era of motor vehicles. These are among the most prized collectibles, valued for their rarity and place in the timeline of automotive development.

Whatever category your collectible car falls into—classic, vintage, or veteran—classic car insurance is designed to provide the specialised coverage that these unique vehicles require.

In terms of what your car is protected against, classic car insurance is inherently a comprehensive policy. Anything less than comprehensive would not suffice, as it's the only type that fully protects your car. This means it shields your vehicle against all the same situations most comprehensive policies cover, including:

• Accidents. Damage to your car from collisions, including the repair or restoration costs.
• Theft. Protection against the theft of your vehicle, crucial for rare and valuable classic cars.
• Vandalism. Coverage for intentional damage, recognising the appeal of classic cars to potential vandals.
• Natural disasters. Shields against damage from events like floods, fires, and storms.
• Damage from animals. Ensures repair costs are covered if an animal damages your vehicle.
• Falling objects. Protection from damage caused by things like tree branches.
• Liability insurance. Covers damage you cause to others or their property, a fundamental component of any car insurance policy.

• Windscreen and window glass cover. Specific coverage for the repair or replacement of the car's glass, which can be particularly important for classic cars where original glass can be rare and expensive.
• Cover for modifications. Recognises that classic cars often embody a series of personal and historical modifications, automatically protecting these enhancements against damage or loss (unlike standard policies where this is optional or not included at all). 
• Any other features you’ve added. You can usually also get extra cover for roadside assistance, cover for your trailer and clever for personal items left in your vehicle.

When it comes to classic car insurance, agreed value is not just the preferred option; it's practically essential. The distinction between agreed value and market value becomes stark when you compare classic cars to everyday vehicles.

• Market Value is a straightforward choice for vehicles like a Toyota Camry, where depreciation is expected, and replacement is simple. This approach benefits insurers for standard cars because they can adjust payouts based on the car's current market price, which usually saves them money in the long run. It's a practical, cost-effective option that keeps premiums down, acknowledging that replacing a Camry with another of similar specs isn't a monumental task.
  
• Agreed Value is a different story for classic, vintage and veteran cars. These vehicles don't follow the typical depreciation curve. Instead, they might maintain or increase in value, making market value coverage a mismatch. Agreeing on a car's value upfront with your insurer means if something happens to your car, you're paid out that specific amount, no haggling over depreciated market prices.

The problem with choosing market value for a classic car becomes apparent when you consider replacement. If your classic car is totaled or stolen, finding an exact, or even similar, replacement on the open market can be an immense challenge. Sometimes, insurers might not even offer to cover a classic car at market value because of these difficulties.

If you go with agreed value and you need to make a claim, the payout you get is based on a value you and your insurer have agreed on beforehand. It's a set figure that aims to reflect your car's worth. Sure, this amount might not cover the cost of a like-for-like replacement due to the rarity of these vehicles, but it does give you a fair starting point to look for another classic or compensate for your loss.

To figure out the "agreed value" for your classic car with the insurance company, it basically comes down to a few steps:

1. Share the details. You start by giving all the info you have about your car - think model, age, any work you've done on it, and its overall condition.
2. Get it checked out. Usually, you'll need a professional to take a look and put a price on how much your car's worth. They really dig into everything that makes your car special.
3. Do some homework. Both you and the insurance folks might look up what similar cars are going for, just to make sure the number makes sense.
4. Come to an agreement. With all this info, you and the insurer decide on a value that feels right. That's the amount they'll cover if anything major happens to your car.
5. Check-in occasionally. Every so often, you'll revisit this agreed value, especially if you make any changes to your car or if its market value shifts.

It's about making sure the insurance amount truly reflects what your car is worth, so you're covered properly.

Deciding whether you need classic car insurance largely depends on the type of vehicle you own and your intentions with it. For example, owning a high-value, rare car like a Shelby Mustang clearly justifies the need for classic car insurance because of its potential for appreciation and uniqueness.

On the other hand, if you have a Holden Commodore from the early 2000s, which might be more common but still holds a special place among enthusiasts, you might find that standard insurance suffices. In such cases, it's essential to ensure your policy offers the appropriate add-ons, including:

• Agreed value cover. Essential for ensuring your car is covered for its full collectible value rather than just its depreciated market value.
• Modification cover. If you've made any upgrades or customisations to your car, this add-on ensures those enhancements are factored into your car's coverage, protecting the investments you've made.
• Choice of repairer. This comes in handy if you have a mechanic you fully trust to work on your car.
• Windscreen and window glass cover. Repairing a chipped windscreen on a 20-year old car can get expensive, so this optional add-on is worth considering.

In other words, a standard policy with carefully chosen add-ons and an agreed value clause can provide ample protection for many classic cars, ensuring your peace of mind while on the road.

If you think a standard comprehensive policy will work for you, check out some of these top providers who offer flexible add-ons to protect your classic ride.