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Classic Car Insurance Guide

There’s 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 only drive their cars 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 UK 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 (SORN).

What’s the definition of a classic car?

This is a much debated question with varying views. Generally for the purposes of car insurance, most insurers assume a classic car to be at least 20 years or older. However, some insurers regard 15 year old cars as modern classics. It’s 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 vehicle’s 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 you’ll 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 vehicle’s worth, which you can get by having a valuation report carried out by an independent valuation expert or Owners Club. It’s 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 classic models increase in value as they get older, so if you don’t update the value you could be left with an insurance shortfall.

It’s 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. It’s 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 you’ll 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 don’t 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 reward’.

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 10%. You don’t necessarily have to opt for comprehensive insurance, because some providers
offer third party or third party, fire and theft cover. However, while the premium may be lower, so too will the level of protection. It’s therefore important to weigh up the value of the saving on the premium against the risk of having a more limited policy. It could prove 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 UK Continuous Insurance Enforcement rules, which took effect in June 2011.

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.