How Does Classic Car Insurance Work: A Guide to Protecting Your Pride & Joy

Your classic car is likely to be your pride and joy. Classic car owners are passionate about their vehicles, spending time and money on…

Your classic car is likely to be your pride and joy. Classic car owners are passionate about their vehicles, spending time and money on the perfect treasure. Whether you own a collection of vintage cars or a single specimen, you need to have a specialist classic car insurance policy to have peace of mind. So, how does classic car insurance work?

From accidental damage to theft to breakdowns, any number of things could cause you need to make a claim. In this guide, we’ll look at what classifies a car as a classic and how to make sure your insurance policy is comprehensive enough to combat any situation you find yourself and your classic car in.


What is a Classic Car?

As a classic car owner, you are likely to have done a lot of research into the industry, or at least the make and model you own or are interested in. However, before we answer the question of how classic car insurance works, we can take a look into the actual definition of a classic car. In the UK, the term ‘classic car’ is not as minutely defined as other countries such as the US. In fact, the only hard-line date we have refers to the tax cut off applied to cars made before the 1st January 1977.

HMRC dictates a classic car as being older than fifteen years and with a value of more than £15,000. Most collectors deem any car that has a significant influence on car culture. For example, models like the Golf GTI, although made after 1977, had a huge impact on the motor industry and became synonymous with the time in which it was released.

The vagueness of these definitions is a point of contention for car collectors, but most agree that vehicles with technical meri are usually agreed on as being classics.

One of the biggest elements affecting classic cars is nostalgia. As mentioned above, a model of car can become so synonymous with the year or even decade of its release that it brings about memories and emotions that stir something in the owner, and peaks interest with subsequent owners. This keeps the spirit of the car alive, and helps it continue to increase in value as the years go on. It is this kind of feeling that means we can consider the Delorean DMC-12 a classic, in spite of its negative features.


Ferarri Testarossa car


Why Do You Need to Insure Your Classic Car?

So, how does classic car insurance work and why do you need to invest in an extensive policy? Well, for many classic car owners, their vehicle is a passion project. Whether you have spent years hunting down the car of your dreams, or you own several classic cars, being certain they are protected against all possible situations is the best way to gain peace of mind.

There are a few reasons why insuring your classic car might be cheaper than insuring regular modern vehicles. For many people, a classic car is often a secondary vehicle. This could be for a number of reasons, but it is mainly down to the expense of running classic cars, which often guzzle more petrol, and also the risks presented to your specialised vehicle when it’s on the road.

Moreover, many insurers consider drivers of classic cars to be more careful when they do drive their pride and joy on the road. The chances of getting into accidents is therefore reduced because of the extreme care that is taken. A lot of brokers will only offer policies should your car be driven fewer than 5000 miles per year, which is another reason many choose to keep their classic car as a secondary vehicle, using a more modern and less expensive car as a daily runaround.

Classic cars can often be difficult to repair, depending on the make and model. It could be that parts are scarce, or you may struggle to find a mechanic with a deep understanding of your classic car. Of course, insuring your vehicle against anything from a minor collision to vandalism is the only way to secure its safety and pay the often highly-expensive costs of repairs or replacement parts.


Why Should You Choose Comprehensive Insurance?

When asking how classic car insurance works, you need to think of the various features that make up a comprehensive policy. The legal minimum level of cover for motor insurance in the UK is third party only (TPO), which protects you from claims made against you by a third party in the event of an accident. This means that the cost of repairing their vehicle is covered, but your own repairs will come out of your pocket.

This is not the only reason you should opt for a comprehensive, detailed policy. There are any number of situations that could befall your classic car. Let’s take a look at a few of these:

  • Increased chances of theft – Your vehicle is your prized possession so there is no reason to think it could be someone else’s too. A classic car is an attractive target for thieves and, although it will be registered to you and would perhaps initially be hard to sell on, there will always be someone in the market for it
  • Repairs can run into the thousands – As mentioned above, repairs for classic cars can be very expensive as parts are rare and hard to come by. It is not just engine parts that can be hard to replace either, cosmetic issues such as scratched paintwork or small dents and dings can also be harder to fix than a regular car
  • Your car could depreciate in value – Although your classic car is likely to appreciate in value, the value could also go the other way too. Without a comprehensive policy that offers Agreed Value Cover, you could find yourself out of pocket in the event of a total loss claim.


Classic Jaguar car


What Insurance Features Do You Need?

So, how does classic car insurance work in terms of including necessary features? Every broker is different and offers varying standard policies that could include any number of features. You can also build up a bespoke policy that is tailored to the specific needs you have as a classic car owner.

Some of the features we consider to be of the highest importance include:

  • Agreed value cover – As we mentioned above, in the event of total loss claim, you will be paid out for the market value of your vehicle as standard. If your car has depreciated in value in the time you have owned it, you will not be able to claim for the amount you bought it for. If you agree a set value with your insurer when you set up your policy, you will be paid that amount which can ensure you receive what your car is truly worth
  • Laid up cover – If your classic car is a working project for you or is consistently kept off the road (on a private driveway or in a garage for example) and is not driven, you can apply for a SORN (statutory off-road notification). You can then ensure your car for the time it is off the road, thereby paying out if it is stolen or vandalised
  • Modified classic car insurance – Some car enthusiasts upgrade or modify their classic cars. In this instance, it is wise to have cover as any deviation from factory standard can negate some regular car insurance policies. This is usually down to the modified parts not being approved by the manufacturer and changes in the car’s performance could add further risks on the road
  • Track/Event Day Cover – Many classic car lovers enjoy the buzz of track days or meet-ups where they can share their passion with other enthusiasts. These events are often busy and require insurance in order to protect your car from anything that could go wrong at such a large-scale event


How Can You Reduce the Cost of Your Premium?

The last thing you want when you have shelled out a large amount of money for your classic car is to pay over the odds to insure it. There are many ways you can reduce the cost of your premium as well as lessening your chances of making a claim. For example, keeping your vehicle secure, covered up in a garage or under a tarpaulin, will in itself reduce the cost of your insurance as the chances of it getting stolen will not be as great. Using an immobiliser or a steering lock will also help as it shows your insurance broker that the security of your vehicle is a prime concern.

Limited mileage insurance is an excellent feature to include as part of your policy. If your classic car is your secondary vehicle and is driven fewer than 5000 miles per year, you can qualify a reduced premium of up to £1500 in some cases. This is because your broker knows your car will not be on the road much, lessening the chance of it being in an accident.

Registering your car as part of a car club can help reduce your premium. Some brokers offer excellent discounts, often up to 25%, if you are a member of a car club. The club itself also offers numerous benefits including discounts on parts or servicing. It is always worth investigating these clubs, not just for the physical benefits but also because it can be extremely rewarding to have a community of like-minded people who are as passionate as you are about your classic car.


Your classic car is your passion, make sure it is protected.