Why Your ’69 Camaro is Terribly Underinsured on a Standard Allstate Policy.
They Think It’s a Used Car. You Know It’s a Priceless Heirloom.
I once made the mistake of insuring my restored 1969 Camaro on my standard auto policy. I thought I was covered. When the car was damaged, the claims adjuster came out with a Kelley Blue Book printout and offered me the “Actual Cash Value” of a 50-year-old used car, which was about $8,000. He didn’t care that I had invested over $40,000 in it. A standard policy is designed for daily drivers and depreciation. It is completely clueless about the true value of a classic.
Classic Car Insurance: The “Agreed Value” Secret That Guarantees Your Payout.
We Shook Hands on the Value BEFORE the Accident.
For my classic car, I now have a specialized “Agreed Value” policy. When I bought the policy, I and the insurance company, with the help of a professional appraisal, agreed that the car was worth $50,000. That number is written into the contract. Now, if the car is ever totaled, there is no negotiation. There is no depreciation. They simply write me a check for the full $50,000 we agreed upon. It is a simple, honest, and guaranteed way to protect a special vehicle.
Limited Use and Mileage Restrictions: The Trade-Off for a Much Cheaper Premium.
The “Pleasure Use” Promise That Saves You a Fortune.
Classic car insurance is often surprisingly cheap. My policy for my $50,000 Camaro is less than the policy for my $25,000 daily driver. What’s the catch? The policy is based on the promise of “limited, pleasure use.” I agree that the car is not my daily driver, I will keep the annual mileage below a certain limit (e.g., 5,000 miles), and I will use it for hobbyist activities like car shows and weekend cruises. In exchange for these restrictions, I get a massive discount on the premium.
How a Standard Policy Will Pay You “Actual Cash Value” for Your Classic (Aka Peanuts).
The Destructive Power of Depreciation.
A standard auto policy is based on the concept of “Actual Cash Value” (ACV). ACV is calculated as the replacement cost minus depreciation. For a daily driver, this makes sense. For a classic car, it is a disaster. An ACV calculation sees a 40-year-old car and applies 40 years of depreciation, resulting in a tiny payout that completely ignores the tens of thousands of dollars you’ve invested in restoration and the car’s rising market value as a collector’s item.
Protecting a Hobby vs. Protecting a Daily Driver.
Two Different Assets, Two Different Policies.
A standard auto policy is designed to protect a piece of utility equipment—your daily driver, the machine you use to get from A to B. A classic car policy is designed to protect a piece of art, a hobby, a passion project. The entire philosophy is different. A classic policy understands the emotional and financial investment, the limited use, and the unique valuation of a collector vehicle. It is a policy built by car people, for car people.
Why Companies like Hagerty Understand Your Car Better Than Geico Ever Will.
The Power of Specialization.
A standard insurance company like Geico is a massive machine designed to insure millions of identical Toyota Camrys. They are a volume business. A specialized carrier like Hagerty or Grundy is a boutique. Their entire business is focused on understanding, valuing, and protecting classic and collector cars. Their underwriters are experts, their claims adjusters are specialists, and their policies are crafted specifically for the needs of the hobby. You are getting expertise, not just a commodity.
The “Garage” Requirement and Other Rules of Classic Car Insurance.
Protecting the Asset, 24/7.
To get the best rates on a classic car policy, you will have to agree to a few common-sense rules. The most important is the “secure storage” requirement. You must have a locked, enclosed garage to store the vehicle in. They will not insure a valuable classic that is left out on the street. You will also likely need to prove that you have a separate, primary daily driver vehicle for each licensed driver in your household.
Don’t Let an Adjuster Use a “Kelly Blue Book” Value on Your Irreplaceable Car.
The Wrong Tool for a Unique Asset.
The moment a claims adjuster from a standard insurance company tries to use a “book value” to determine the worth of your classic, restored, or modified car, you know you are in trouble. These tools are designed for mass-produced used cars, not for unique, irreplaceable assets whose value is determined by condition, rarity, and provenance. An “Agreed Value” classic car policy completely removes these useless tools from the equation.
A Tale of Two Totaled Classics: One on a Standard Policy, One on a Classic Policy.
A $40,000 Difference.
Two friends had their nearly identical classic Mustangs stolen. One had his car on his standard auto policy. The company depreciated the value and offered him $10,000. The other had a classic car policy with an “Agreed Value” of $50,000. He received a check for the full $50,000. Same car, same loss, but a $40,000 difference in the outcome, all because one chose the right type of insurance policy.
If Your Car is Special, It Needs a Special Policy. Period.
Don’t Insure Your Masterpiece Like a Toaster.
This is the simple, powerful truth. If your car is a classic, a collector, an exotic, or a highly modified vehicle, it is a special asset. You cannot and should not protect it with a generic, one-size-fits-all standard auto policy. You are insuring a masterpiece, not a household appliance. It requires a specialized policy that understands its true value and guarantees to protect it.