
How Does Insurance for a Collector Vehicle Differ From Standard Insurance?
Unlike standard vehicles, collector cars often require specialized coverage to protect their value and ensure they are adequately insured.
Valuation and Coverage Limits
One of the primary differences between insurance for collector vehicles and standard auto insurance is how the vehicle’s value is determined. Standard auto insurance policies typically use actual cash value (ACV) to determine the payout in the event of a total loss. This means the insurance company will consider the vehicle’s depreciation and pay an amount based on its current market value. For most everyday vehicles, this approach is sufficient.
However, collector vehicles often appreciate over time, making ACV an inadequate method for determining their worth. Instead, collector car insurance policies use agreed or stated value to establish the vehicle’s value. Agreed value is a predetermined amount agreed upon by the owner and the insurance company, reflecting the car’s actual market value without depreciation. This ensures that the owner receives the full agreed-upon amount in the event of a total loss, providing better financial protection for valuable collector cars.
Usage and Restrictions
Another significant difference between collector vehicle insurance and standard auto insurance is the usage and restrictions placed on the vehicle. Standard auto insurance policies are designed for daily commuting and regular driving. As such, they do not typically impose restrictions on mileage or usage.
Collector vehicles are generally driven less frequently and are often used for special occasions, car shows or weekend drives. Insurance policies for these vehicles may include mileage limits and restrictions on how and where the car can be driven.
Additionally, collector car insurance policies may require that the vehicle be stored in a secure, enclosed garage when not in use. This requirement helps financially protect the car from potential damage or theft, safeguarding the owner’s investment.
Contact Us
Contact Herman Bell Insurance Agency for a collector vehicle insurance quote.
This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.
Categories: Auto Insurance, Blog