Insuring Your Show Car

One of the biggest thrills of owning a classic or a muscle car is driving the thing. After you've spent the last five years pouring your heart, soul, and money into the project, you want your friends to see it at the local cruise-in and maybe even race the vehicle once in awhile. However, if you don't have insurance, you're running a huge risk. In fact, it's the law in all 50 states that you must provide proof of liability insurance if you are stopped by a police officer. When you build a specialized vehicle like a '66 Chevelle, a '69 Camaro, or a '70 Nova, the last thing you want to do is spend the same amount of money for insurance on a seldomly used car that you would on one you drive every day.

But before you resign yourself to spending big money on insurance, heed our advice. A number of specialty car insurance companies offer policies specifically for vehicles like yours. Most of these companies are underwritten by larger, more well-known insurance companies and will probably place restrictions on the vehicle to be covered. But if you want to drive the car and be legal, these are the trade-offs.

WHERE TO LOOK

The easiest way to shop for specialty car insurance is by telephone. Just call an independent insurance representative who handles daily-driver insurance needs. That person, because he represents numerous auto insurance companies, should have ties to underwriters and brokers who deal only with antique car insurance. If not, the back of automotive-related magazines, such as Chevy High Performance, Hot Rod, Hemmings Motor News, as well as Old Car Weekly, and the internet are all excellent sources.

Word of mouth is also a great way to find a reputable insurance company. Ask people you meet what they do about insuring their vehicles. Get their agents' names, the companies they underwrite for, and how much they pay for six-month and one-year periods. Then at least you'll be able to compare what you've learned with what the insurance company tells you.

KINDS OF POLICIES OFFERED

Very few of the antique policies we inquired about offer anything less than "full coverage." Full coverage includes general liability, collision, and comprehensive, which covers fire, theft, flood, and other natural disasters that may destroy your car. Additional coverage can be purchased to provide protection against uninsured motorists and, in some states, this may be a requirement upon taking out primary coverage. Check with your local insurance agent or the company handling your antique policy to be sure.

When taking out an antique policy, you'll have to decide exactly what kind of coverage you want. We found that most of the companies use an agreed-upon value for determining the worth of your car. However, there is also stated and actual cash value. These three items are not always defined, so make sure you ask prior to binding the policy.

Agreed-upon value is the most common method for determining worth of a car. Value is agreed upon by both the owner and the insurance company representative, which determines the payoff to the insurer upon loss. This value is set using a variety of parameters: the owner's word, an appraisal, and comparable values from a Kelly Blue Book, Old Car Weekly, and Hemmings Motor News to name a few. Usually, an appraisal is not needed unless an owner drastically overvalues his car.

Stated-cash value is based upon the purchase price and upgrades. The premium paid depends on how much has been invested and the value the owner and insurance company set. So don't expect a premium under $200 to cover a car valued at $60,000. That's unrealistic. Market value of the car may also have some influence on the car's stated value. However, the problem with a stated-value policy is it will depreciate for each year the policy is in effect. Payout at the time of the loss will be determined on the value of the vehicle at that given moment.

Actual-cash value is the determining factor in standard, daily-driven vehicle premiums and follows basically the same suit with an antique policy. Vehicle value is determined by the original cost of the automobile adjusted for depreciation. Even though a vehicle may actually appreciate over time, insurance companies don't recognize that factor, so difficulties may arise if and when the time comes to collect on an actual-cash-value policy. Despite records of appraisals and the threat of lawsuits, insurance companies are required to only pay actual value based upon Kelly Blue Book values. So if you own a '69 ZL1 Camaro or a '70 SS 454 Chevelle, have an actual-cash-value antique car insurance policy, and the car is destroyed in an accident, the company will only pay what a '69 Camaro or '70 Chevelle is worth according to the Kelly Blue Book. But if you're considering an actual-cash-value insurance policy, get the facts and understand the coverage offered before agreeing on a policy.

LIMITATIONS

How much you drive the car also plays a major factor in determining the actual price to be paid for the coverage allotted. Most policies have mileage restrictions. Some are as little as 500 miles, while others are more flexible. However, the average seems to be 2,500 miles. This means the car can not be driven more than 2,500 miles in a calendar year. So if you're planning to drive on Hot Rod's cross-country Power Tour, you might exceed the limit of your policy. Several of the companies we talked to require you to fill out a form specifically stating that your annual mileage will not exceed the amount indicated in the policy. And when it comes time to renew that policy, you will be obligated to provide the insurance company with a true odometer reading. Certain companies ask that you only drive the vehicle to and from shows and stay with it at all times. This means if you leave the car to get a hot dog from the nearest vendor and a tree suddenly comes crashing down on it, or it suddenly burns to the ground and you are nowhere around, the car will not be covered. On the other hand, we did find a number of companies that don't care when or where the vehicle is driven, just so long as it doesn't exceed the mileage restriction.

NONSTOCK VEHICLES

Owning a '70 El Camino with a screaming 8-71 'huffer sticking through the hood might be an instant turnoff to lots of antique insurance companies, but not all of them. Some companies require the vehicle to remain 100 percent stock, while others don't. One company we talked to claimed some Pro Street vehicles and supercharged cars are insurable; however, cars running nitrous oxide, whether they're bone-stock rides or serious tire fryers, are not. Every situation varies.

Photographs are the saving grace for insurance companies. Regardless of whether the car is stock or heavily modified, all insurance companies will require pictures. If the car is stock, one photo is usually sufficient. Modified cars require four photos: two exterior shots from the front and rear, one interior shot, and one engine-compartment shot.

All of the insurance companies we talked to would not cover the vehicle if it was used for racing, be it drag or autocross. You can drive the car to and from the event and total it and still be covered. Wreck the car when racing, and it won't. So what's the answer? All drag race facilities are required to have liability insurance, which will cover bodily injury, but it doesn't cover fixing the sheetmetal. So if you want to race, beware.

SHOW ME THE POLICY

Most applicants must go through a qualifying procedure. Policies vary from state to state and from insurance company to insurance company. Most companies require the vehicle to be at least 10 years or older, but no earlier than a 1900s-era vehicle. However, in some instances, no limitations were placed on age. Generally, the vehicle must be stored in a locked garage of some sort. Be prepared for the company to ask about your driving record and to require you to exclude certain drivers such as your teenage kids, wife, and/or friends.

The minimum amount of coverage obtainable is $50,000/$100,000/ $50,000, but varies depending upon minimum limits of liability coverage set in each state. This means you are covered up to $50,000 per occupant of the vehicle involved in an accident, $100,000 per occurrence of an accident, and $50,000 for any property damage incurred during an accident. This is typically the bare minimum, and you can expect to pay around $.60 per $100 of vehicle coverage if the car is bone stock. Modified cars usually cost $1.40 per $100. So figure if your agreed-upon cash value is $10,000 and the car is stock, expect the comprehensive and collision portion of your policy to run $60 for 12 months. Be sure the insurance underwriter--the company that is actually issuing the policy--is an admitted company to the United States, and specifically the state in which the policy will be written. An off-shore insurance company may offer you a screamin' deal, but the odds of them being around when it comes time to pay a claim are slim. When in doubt, ask questions. An insurance company is there to provide you a service.

CONCLUSION

The moral of the story: Know your policy's limitations, constraints, and in certain instances, exact wording. It's just a matter of doing your homework. Whichever coverage you chose, be as specific as possible with the insurance company, and under no circumstance should you lie in hopes of reducing your premium. Tell the company rep your intentions with the vehicle, ask lots of questions that you feel may be pertinent to coverage, and present different situations to see how he responds. If you feel comfortable and satisfied with the answers, then make the deal. In the end, both you and your car will be better off should the need ever arise to collect on your policy.