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Classic Car Insurance is Different From Regular Car Insurance

February 20, 2024

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Classic car insurance provides additional benefits compared to your daily use vehicle.  Protect your collectible vehicle’s value.  There are different types of loss settlement terms to choose from when insuring your vehicle.  Representing Hagerty Insurance, we can help protect what your car is really worth.    

Guaranteed Value 

Through Hagerty Insurance, we can offer a Guaranteed Value loss settlement term, also known as agreed value.  In the event of a covered total loss, you will receive the full insured amount (less any deductible or salvage value) of the vehicle value that was agreed upon upfront.  We may require an appraisal or photo of the vehicle.  Regular car insurance offers “actual cash value” or “stated value” coverage, which may depreciate the value of your vehicle.   

Stated Value 

Stated Value will allow you to set your own vehicle value, but the adjuster is allowed to pay the vehicle’s depreciated cash value amount or the cost to replace the vehicle.  Most likely they will choose the lessor of the two amounts.    

Actual Cash Value (ACV) 

Standard insurance adjusters will take depreciation into consideration at the time of loss.  This is the value of your vehicle minus wear and tear. There is a good possibility if your restored classic is insured based on ACV, it is underinsured. 

Cherished Salvage  

Cherished Salvage coverage provides the best of both worlds. In case of a covered total loss, keep your vehicle and receive its Guaranteed Value.  Any vehicle over 10 years old can purchase this additional coverage.  Cherished Salvage coverage lets you retain salvage of the vehicle in case of total loss without the salvage value being deducted.  You will still receive the Guaranteed Value and still get to keep the vehicle.   

When you own a rare vehicle that is hard to replace, consider adding Cherished Salvage coverage.  Let’s look at an example. Brian spent many hours restoring a hard-to-find F150 with all the options. He knew he wouldn’t be able to find a vehicle like this again, so he purchased Cherished Salvage coverage.  Never really thinking he would have to use this coverage, when the vehicle was deemed a total loss due to smoke damage, he was relieved he spent the extra money to purchase this coverage.  He got to keep the vehicle and received the value agreed upon.  In contrast, if he had just added this vehicle to his personal auto policy, the outcome would have been different as standard auto policies do not offer Cherished Salvage or Guaranteed Value loss settlement terms.   

Conclusion

Having a specialized policy for your prized possession is our focus.  There are optional policy endorsements we can add to a Hagerty policy to tailor a policy just for you.  Automobilia, spare parts, automotive tools, cherished salvage, and vehicles under restoration are some examples.   We will gather some additional information based on where the vehicle is stored, how often you drive the vehicle, what the vehicle is used for, and who primarily drives the vehicle.   We understand these types of vehicles are valuable to you.  Our goal is to provide the coverage you desire as we know many memories and hours of restoration were put into restoring these collectible vehicles.