What Classic Car Insurance Coverage Should You Get?

As an owner of a classic car, exotic car or modified car, a primary concern when shopping for the best collector car insurance would be how much the insurer would pay in the case that your car is a write off or stolen. You’ve invested your money and time into this beautiful car and while it’s devastating to lose an irreplaceable masterpiece, you want the peace of mind knowing you will get the best payout for your car value. The payout amount if your car is a write off is dependent on the type of coverage you have. At the end of this blog, if you are unsure which type of coverage you have, be sure to speak to your BIG broker about the best collector car insurance to ensure you are covered.

What Is Actual Cash Value?

In general, a car begins depreciating from the time it is driven off the lot. Because of this, insurance companies will consider the depreciated value in deciding whether to repair or write off your car. The payout for a write off is adjusted based on the vehicle’s worth at the time of the accident, which is called Actual Cash Value. Instead of what you originally paid for the vehicle, insurers will look up the typical value of that car and offer you a settlement for what the car is worth in cash at the time of the accident. With a classic car, this may not be your best option to protect the value of your precious vehicle if it is a write off.

Agreed Value Insurance (Guaranteed Value)

Agreed Value Insurance, also known as Guaranteed Value, is the best collector car insurance coverage and is offered primarily by specialty insurers. Instead of the insurance company offering you the value of the vehicle at the time of the accident if your car is a write off, the amount to be paid out for the vehicle is decided when you start the policy. Before the policy is issued, you and the insurer will determine the value of the vehicle according to appraisals, photos and other relevant documents. This agreement would then be listed in your policy wording. With Agreed Value coverage, you are being guaranteed by the insurer that they will cover a total loss at the agreed-upon value. 

If you are unsure if you have this coverage, talk to your broker and go over your policy wording. If the actual language in the policy contract says ‘Agreed Value’ or ‘Guaranteed Value’ then you are covered for the value of the vehicle that you agreed to at the start of your policy. If not, then you’ll need to re-evaluate your coverage so that you’re covered if your car is a write off.

What is Stated Value?

The final option you may be offered for your collector car insurance is Stated Value, but make sure you read the fine print before you agree to this coverage as it is not always the best collector car insurance coverage in certain situations. You tell your insurer what your car is worth with supporting documentation and your policy states they will cover for this “stated” amount. However, the caveat with Stated Value is that insurers may have a clause allowing them to choose to pay either the Stated Value OR the Actual Cash Value, whichever is less. This means there’s a chance you won’t receive the full stated value for your classic car if it has depreciated in value.

What’s the Best Option?

If you want to guarantee the value you expect on your classic car, refuse to settle for anything less than Agreed Value (Guaranteed Value). Owning a classic or collector car that maintains or increases in value will benefit greatly from this option to ensure you receive the best payout. Many of the bigger insurance companies will not have an option for Agreed Value for classic car owners, which is why BIG is a great option! At BIG we have access to the best collector car insurance companies that specialize in classic cars, so you know you’ll be taken care of. Contact us to get started on a quote and insure your classic car with the best coverage.