When you have a car insurance policy, understanding how potential claims will be settled is important. This knowledge can help you find the right policy for your needs and can help you set realistic expectations if you file a claim. This is especially true for antique and classic cars, as insurance can work a little differently for these types of vehicles.
Typically, car insurance policies are settled on an actual cash value (ACV) basis. This means that, when you file a claim, a claims adjuster will review the age and condition of your car and subtract depreciation from your settlement. However, some car insurance companies offer different claims settlement options for certain types of vehicles. Stated value and agreed value insurance policies work differently than ACV policies. Understanding these differences might help you decide what kind of policy is right for you and your car.
What is agreed value insurance?
Agreed value car insurance is when you and your insurance company agree on how much your car is worth. If your car is damaged, you will get either the agreed value amount or the amount it takes to repair the damages, whichever is less.
You might choose this option to avoid the depreciation of your vehicle. Some cars can lose market value fast and being able to lock the value in place with your insurer can balance that out if the car is totaled. If you have put a lot of work into a car, like restoring original features, agreed value auto insurance may be a good option.
What is stated value insurance?
Things are a little more complicated with stated value insurance. With stated value, you still place a value on your vehicle, but the company does not agree to pay that amount if the vehicle is damaged. Essentially, the stated value is the maximum payout you will receive. If your vehicle is damaged, the company may payout based on the stated value, the current cash value or the cost of repairs, whichever is less.
Stated value policies can allow you to undervalue your vehicle, which then makes your premium payments cheaper. But because it could also lower the amount you will be paid if you file a claim, this approach can be somewhat risky. Discussing the benefits and drawbacks of stated value policies with your agent before making a decision could be worthwhile.
Coverages for antique and classic cars
Different vehicles have different needs. This is particularly true of antique and classic cars. Because these cars may be more valuable than standard vehicles, could be collectible and may have undergone expensive restoration work, you should consider your car insurance needs carefully.
In general, you will see many of the same coverages available for classic and antique cars as you do for your day-to-day vehicle. In addition to possibly having the choice for agreed or stated value, you may want to consider the following coverages to protect your finances from the added cost and complexity of repairing or replacing these specialty cars:
- Comprehensive: This option provides coverage for damage to your vehicle caused by things like hail or storm damage, theft, vandalism, hitting an animal, fires and glass breakage.
- Collision: This coverage provides financial protection for damages to your vehicle caused by collisions. Usually this is you colliding with another vehicle, but it would also cover the damages you cause to your vehicle by colliding with a tree, a pole, a bike or a building.
- Roadside assistance: Many companies and policies that are tailored to classic and antique cars offer specialized roadside assistance coverage, which can involve the use of a flatbed truck and soft tie-down straps to prevent damage to your vehicle.
- Tools and spare parts coverage: If you restored your car yourself, you likely have some tools and maybe some spare parts. You might be able to cover these items on your auto policy.
- Automobilia coverage: Believe it or not, some auto insurance policies offer some coverage for your classic automobilia, including hood ornaments and wall decor.
Many car insurance companies offer specialized policies for classic, antique or modified cars. These policies are similar to standard policies but with adjustments and additions to accommodate the unique nature of these vehicles.
Frequently asked questions
Can I insure any car with agreed or stated value?
Probably not. You usually only have the option to choose agreed or stated value coverage if you are insuring a classic, antique or modified vehicle. Standard private passenger cars, the type of vehicles you use on a daily basis, will probably not be able to be insured this way.
Is agreed or stated value better?
The best option for you will depend on your vehicle, financial needs and intent. Stated amount insurance can save you money in the short term by reducing premiums, but it could mean you get less of a payout if you file a claim. Agreed value insurance is likely to cost a bit more but can offer better protection for classic, antique or modified vehicles. Reviewing your options with a licensed agent might help you decide what option is right for you.
What is the best car insurance company for classic cars?
The best car insurance company for your classic or antique car will depend on your individual rating factors and preferences, like any other type of insurance. Car insurance policies are nuanced enough that what is best for one driver may not be best for another. Different people and vehicles benefit from different types and limits of coverage. Knowing what you want from a policy and getting quotes from several companies might be helpful.
How much does car insurance cost?
The average cost of car insurance in the United States is $1,674 per year for full coverage. However, your price will vary based on a number of factors. The insurance company you choose, the coverages and limits you purchase, your age, gender, driving history and the type of car you drive all impact how much you pay.