As with so many things in life, there’s no simple answer. Different insurance companies have different criteria. So how can we work out whether a car is classed as a classic and how we should best insure them? We love to insure classic cars so have provided some advice for you below.
Older cars are no problem as they are divided into classifications:
Veteran: Pre-1904. The cars that are eligible for the annual London-Brighton Run, which commemorates the change in law that meant that cars no longer had to be preceded by a man with a red flag.
Vintage: 1905 to 1930. Considered to be the golden era of car production with the UK leading the way and USA not far behind.
Edwardian: Some experts sub-divide Veteran and Vintage further with cars from 1901-1910 referred to as Edwardian.
Post-Vintage: 1931-1945. Technological improvements and – sadly – the requirements of war, introduced many of the elements of cars that we now take for granted.
Historic: The DVLA classify a car as “Historic” once it is over 40 years old. Exemption from road fund licence can be claimed by declaring the car as Historic and having the V5 (logbook) changed to that classification. Cars over 40 years old are also exempt from having to go through the MOT test but it is important to understand that the car must still be roadworthy. If it is not, the insurer has the right not to pay out in the event of an accident.
It is really the cars less than 40 years old that can be difficult to confirm as being “classic” for insurance purposes. Many insurers use a cut-off date of 15 to 25 years old and others have a list of makes/models that they refer to. There are also rare models, prototypes, restorations/recreations etc. This is why placing your insurance needs in the hands of an expert classic car insurance broker is essential. AIC/Diamond Classic have been managing these policies since 1986 and some of the staff have been with the company for nearly that long.
Is classic car insurance cheaper?
Please refer to my first paragraph but generally, yes. Classic cars are often used less and maintained well by mature owners and that is taken into account by insurers. Usually, policies are what we call “net-rated” so there is no no claims discount to be considered. This is excellent for people new to classic cars as there is no wait to build up a maximum discount, as there is with normal car insurance.
Does my car qualify for classic car insurance?
If it falls into the Veteran, Vintage, Edwardian, Post-Vintage or Historic classifications as above, then yes. It is the more recent “modern classics” that create confusion. You need to talk to one of our experts. Sometimes, it is simply a matter of the age of the car. Sometimes, it can be an element of rarity such as being a limited edition, prototype, one-off or a history of previous notable owners.
There are other criteria for classic car insurance qualification:
- Named drivers: policies will not be issued on an “any driver” basis – something which is becoming increasingly less available in normal car insurance.
- Having a “daily driver”: most insurers require the classic to be a second car, not in everyday use.
- Limited mileage: most classic policies have mileage limits from 1,000 to 5,000 per annum. With the average annual mileage for all UK drivers now considered to be around 8,000, this is not onerous. If you are having a particularly active year and find yourself getting close to your limit, it is normally possible to increase it for a small additional cost.
- Security: a garage or secure off-road parking is preferred, especially for more valuable vehicles but again some insurers will consider other situations.
- Driving other cars: another item that is being offered less on normal car insurance and, as you need to have a daily driver, not cover that you should need.
What qualifies as classic car insurance?
A classic, Collectible or Antique car requires insurance that reflects your vehicles uniqueness and value, and we have several Insurers that offer this type of product as a private motor Insurance is not sufficient to protect such a vehicle against loss or damaged.
This type of Insurance is not intended for cars that you use on a regular basis to commute to work in, although we do have some Insurers that will consider this. They prefer a good driving history and the insurance is based on limited mileage of 1500 to 7500 depending on the age of the vehicle, hence why premium can be lower than general motor insurances.
Vehicles need to be at least 20 to 25 years old and it is common misconception that any car can be deemed a classic for this type of cover, but that is not the case and the criteria is different from one company to another. Some insurers require proof that you have a main everyday vehicle which is not insured on a limited mileage policy, so that the classic car is not your prime main mode of transport so are normally classed as second vehicles which do not require or earn any no claims bonus.
High value vehicles are to be kept in a locked garage while at the Home address (and some will consider storage away from the Home), and policies take into account that the vehicle will be laid up during the winter period and they generally cover you for car shows and exhibitions. They also cover vehicles that are being restored on an Accidental Damage, Fire and Theft cover with no road use, and once work completed can increase to Comprehensive cover paying any additional premium due.
Policies can be issued with Agreed values subject to you supplying the required documents and photographs that the insurers request when quoting/issuing cover, this means the insurers will agree the value of your vehicle and it will be noted on your policy, so any claim will be settled at that value less the policy excess rather than at the market value at the time of the claim meaning you could lose money against its value when you took out the policy if not agreed. So this is good news as takes into account money you have spent on the vehicle during ownership.
What are the benefits of classic car insurance?
Most important is the availability of an agreed value. Without this, an older car can be treated as just an older car and valued accordingly in the event of an accident, fire or theft claim. Most insurers can agree value based on a photo array of six photographs – front, rear, both sides, engine bay and interior. More valuable vehicles may require a formal valuation document from an expert – not one who has a financial interest in the car or who has done work on it. Many car clubs offer a valuation service for a reasonable fee. Car values do fluctuate so it is important to review your agreed value regularly. For example, I own two Saabs which I purchased when the market for them was low. Both have increased in value recently – I was recently offered double my original outlay for one which I purchased less than two years ago.
Insurers recognise the value of using repairers familiar with the special needs of older cars so will allow use of specialist garages. However, insurance is a business so labour costs and so on will need to be agreed before work can start.
People get attached to their classics. I had to leave my older Saab with a repairer for a week recently and they were very polite about my daily calls to make sure she was OK. Total loss claims can be traumatic. This is where agreed values are such a relief. Usually, it is possible to accept a cash settlement and the right to purchase the salvage so that the car can then be repaired if required. Bear in mind that any future insurer will need to be assured that repairs have been carried out to an acceptable level, which may require provision of an independent engineers’ report.
Most policies cover use for events such as road rallies. Competition and track day use is the purview of other specialist policies.
Why AIC loves insuring classic cars
We do love to insure a classic car and have been doing so for over 30 years. Whilst the motor car was not invented in Britain, for many decades we produced many of the most famous makes and sold them around the world. Few of those manufacturers still exist.
And what is “classic insurance”? Essentially, it is pretty much like normal car insurance with the added benefit of an agreed value should your vehicle be stolen or damaged beyond economical repair. For most cars, our insurers will agree a value based on a photo array – all four sides (must show registration plate), engine bay and interior. For higher values or where the insurer cannot agree a value based on photographs, a valuation from a car club – most marque clubs offer a valuation service – a dealer or other expert can be provided. However, the valuer must not be someone who has worked on the vehicle themselves – vested interest and all that. Without an agreed value, the car can be treated as just an old vehicle and valued pretty much as scrap.
Most of our classic insurer partners will allow for vehicles to be repaired at a garage of the owners’ choice – subject to being able to agree costs. Where a car is “written-off”, the agreed value is paid but generally the owner can purchase the salvage if required.
Commonly, the classic vehicle insured must not be the only vehicle in the family. There must be a “daily driver.” There is always a maximum annual mileage – anything from 1,000 to 5,000 generally and driving is restricted to named persons. Classic car policies do not accrue no-claim discounts, mainly because the premiums are too low to warrant them. On the other hand, having a claim means not losing any bonus. A garage or other secure building is preferred but insurers will consider – for most vehicles – secure off-road parking on the customers’ own land. Cover can include use for wedding hire and classic rallies but not for competitive racing. Cover for overseas use – what used to be called “Green Card” – is normally included free of charge.
Cars not in current use or being restored can be insured on an off-road basis – a garage or secure building being essential – but valuation can be difficult, especially if the car is in pieces. We did once insure an Aston Martin V8S in five separate places, which is now in one piece, very beautiful and insured for £350,000. Cover does not apply for damage incurred whilst the vehicle is being worked on, so you need to be careful with that welding torch.
Why should I use a specialist insurance broker?
You could go online or on the phone to all the insurance companies that advertise. That could take a very long time. By a single conversation with one of our experts, all that effort is taken away from you. We can guide you to the right insurer for your requirements.
In the unlikely event of an issue with a claim, we will fight your corner. We have staff with qualifications in claims handling.
Please give us a call on 01442 242400 or contact us online today.