Theres a huge amount of pride associated with owning a classic
car, but while many owners spend hours cleaning and polishing their vehicle, do they pay
the same attention to insuring it?
Insurance for classic cars is often cheaper than cover for newer models, but because the
cost and level of protection varies, it is vital to make sure you have the right policy.
Many classic car enthusiasts drive their cars only during the summer months, and it used
to be the case that you could insure your vehicle for only part of the year. However, a
change in the law, which took effect in June 2011, means it is now an offence not to have
car insurance unless you have declared your vehicle as being off the road. To do this you
must complete a Statutory Off-Road Notification.
Whats the definition of a classic car?
If your car is more than 20 years old and worth more than £15,000 it is classed as a
classic car as far as HM Revenue & Customs is concerned. Insurers dont
necessarily use the same definition, though. Some insurers regard 10-year-old cars as
classics; others require the car to be at least 15 years old. Its therefore always
important to check the small print before you buy insurance for your classic car to ensure
it is suitable for your needs.
How much does classic car insurance cost?
A number of specialist insurers cater for the classic car market, but many mainstream
providers also offer cover. As with car insurance for newer models, prices vary, so shop
around to find the right level of cover at the best price.
On the plus side, insurance premiums for classic cars are often cheaper than for more
modern vehicles because the cars tend to be better maintained and driven less frequently.
As a result, insurers receive fewer claims on classic car policies.
What does classic car insurance cover?
Comprehensive insurance cover for a classic car is similar to the same type of policy for
a modern car. However, there are a few notable differences.
One of the difficulties with a classic car is working out its true value. If the insurance
policy pays out the market value in the event of a write-off, the payout may
not reflect the vehicles actual worth. It is therefore worth agreeing the value with
the insurer when you take out your policy. It may mean paying a slightly higher premium,
but at least youll have the peace of mind of knowing how much the insurer will pay
out in the event of your car being written off.
You may be asked to provide evidence of the vehicles worth, which you can get by
having a valuation report carried out by an independent valuation expert. Its a good
idea to ensure that this can be updated annually because you will need to buy a new
insurance policy every year. Unlike most modern cars which depreciate in value, many
vintage models increase in value as they get older, so if you dont update the value
you could be left with an insurance shortfall.
Its also worth checking the details of cover for replacement parts. If your car is
particularly valuable, you might want any replacements to be authentic, so make sure the
insurance is adequate.
Classic cars tend not to be used as everyday transport, so do a low annual mileage.
Its typical for insurers to cap the maximum mileage at around 7,500 a year, so if
you think you might exceed that, check what the implications are with the insurer. You may
find it could invalidate your policy. That said, if you know youll do a higher
mileage, most insurers will cover you, although your premium will be higher.
The other big difference between classic and standard car insurance is that you dont
build up a no-claims bonus on classic car cover.
Does my insurance cover special occasions?
Classic car insurance usually covers events such as vintage rallies and shows, although
expect to pay extra if the event is abroad.
If you hire out your classic car for weddings, you will almost certainly have to extend
the cover because most private car policies exclude use of the vehicle for hire and
Can I save money on my classic car insurance?
If you drive fewer miles each year than the policy maximum, you can often agree a lower
limit in exchange for a lower premium.
Members of recognised classic car clubs should be able to earn a discount on their premium
of about 15%.
You dont necessarily have to opt for comprehensive insurance, because some providers
offer third party or third party, fire and theft cover. However, while the premium will be
lower, so too will the level of protection. Its therefore important to weigh up the
value of the saving on the premium against the risk of having a more limited policy. It
could proof a false economy in the event of a claim.
If you need to take your classic car off the road for a period of time for repair or
restoration, a laid-up policy will cover the vehicle against fire, theft or
damage, as long as it is kept in a garage. This will be cheaper than having comprehensive
cover, but you would need to declare the vehicle to be off the road with the DVLA in order
to comply with the new Continuous Insurance Enforcement rules, which took effect in June
Security of your vehicle is important and classic cars can be particularly
attractive to thieves and vandals. You will pay a lower premium if you fit your car with
approved security devices and keep it in a locked garage.