Why Classic Car Insurance Is Different from Regular Auto Insurance

Classic cars are more than just vehicles—they’re rolling pieces of history, symbols of craftsmanship, and often cherished investments. Unlike everyday cars, they require specialized care, maintenance, and, most importantly, insurance. Standard auto insurance policies simply don’t cut it for classic cars. Here’s why classic car insurance is a whole different beast—and why it matters in today’s world.

The Unique Nature of Classic Cars

Emotional and Financial Value

Classic cars aren’t just transportation; they’re passion projects. A 1967 Ford Mustang or a 1957 Chevrolet Bel Air isn’t valued the same way as a 2023 Toyota Camry. Their worth isn’t based solely on mileage or condition but also on rarity, historical significance, and market demand. Standard auto insurance policies focus on depreciating value, while classic car insurance accounts for appreciation.

Limited Use and Storage

Most classic cars aren’t daily drivers. They’re stored in climate-controlled garages, taken out for weekend cruises, or displayed at car shows. Regular auto insurance assumes frequent use, which increases risk exposure. Classic car insurers recognize lower usage and adjust premiums accordingly.

Key Differences Between Classic and Regular Auto Insurance

Agreed Value vs. Actual Cash Value

One of the biggest distinctions is how insurers determine payout in case of a total loss:

• Regular Auto Insurance: Uses actual cash value (ACV), which factors in depreciation. If your 10-year-old sedan gets totaled, you’ll get its current market value—not what you paid for it.
• Classic Car Insurance: Typically offers agreed value coverage. You and the insurer agree on the car’s worth upfront, and that’s what you’re paid if disaster strikes—no haggling over depreciation.

Mileage Restrictions

Classic car policies often come with annual mileage caps (e.g., 2,500–5,000 miles). Exceed those limits, and you might void coverage. Regular policies have no such restrictions because they assume daily commuting.

Repair and Restoration Considerations

Classic cars need specialized parts and craftsmen. A fender bender in a modern car might mean a quick trip to a collision center, but repairing a vintage Porsche 356 requires expert hands—and that costs more. Classic car insurance often covers restoration costs and OEM (original equipment manufacturer) parts, whereas regular policies may push for cheaper aftermarket alternatives.

Lower Premiums, Higher Standards

Ironically, classic car insurance is often cheaper than regular auto insurance—despite covering higher-value vehicles. Why? Because insurers know classic car owners are typically more cautious, drive fewer miles, and store their cars securely. However, they also impose stricter requirements, such as:

• Proof of a secure garage
• A clean driving record
• Restrictions on using the car for errands or commuting

Why This Matters in Today’s World

The Rise of Collector Car Culture

With social media and auction sites like Bring a Trailer, classic car enthusiasm is booming. Younger generations are getting into restomods and vintage rides, creating a surge in demand for specialized insurance.

Climate Change and Storage Risks

Extreme weather events—wildfires, floods, hurricanes—pose unique threats to classic cars. Standard policies might not cover climate-related damage adequately, while classic car insurers often offer tailored protection for garage storage and transport.

The EV Revolution and Classic Car Values

As electric vehicles dominate headlines, some wonder if gas-powered classics will lose value. Ironically, the opposite is happening—classic cars are becoming even more desirable as relics of a bygone era. Insurers are adjusting valuations accordingly.

Final Thoughts

If you own a classic car, treating it like a regular vehicle is a mistake. The right insurance protects not just your investment but also your passion. In a world where cars are increasingly disposable, classics stand apart—and so should their coverage.