Stated Value Car Insurance: What It Is and When You Need It

Understanding Stated Value Car Insurance

When it comes to insuring a vehicle, most drivers are familiar with traditional auto insurance, which covers a car based on its actual cash value (ACV). However, for vehicles that don’t fit into the standard valuation model—such as classic cars, heavily modified vehicles, or collector’s items—stated value car insurance provides an alternative approach.

Stated value insurance allows policyholders to declare the car’s worth, often reflecting a combination of market value, depreciation, and customizations. However, this type of policy does not necessarily guarantee full coverage for the stated amount in the event of a claim, as insurers can still adjust payouts based on the vehicle’s depreciated value.

When Is Stated Value Car Insurance Used?

While commonly associated with classic and collector cars, stated value insurance may also be applied to:

• Classic & Antique Cars: Owners of classic vehicles use stated value insurance to reflect their car’s collectible worth rather than its depreciated market value.
• Customized or Modified Vehicles: Cars with aftermarket modifications, performance enhancements, or unique paint jobs may require stated value coverage to factor in added value.
• Rare or Limited Edition Vehicles: If a car has limited production numbers or holds historical significance, a stated value policy may be more suitable than standard ACV coverage.
• High-Mileage Commercial Vehicles: In some cases, businesses use stated value insurance for company vehicles with extensive mileage but still valuable utility.

What Qualifies as a Classic Car for Stated Value Insurance?

The definition of a “classic car” varies by insurer, but generally, a car is considered classic if it meets the following criteria:

• Age Requirement: Typically, a vehicle must be at least 20-25 years old to qualify.
• Condition: The car must be well-maintained or restored, often requiring garage storage.
• Limited Usage: Classic cars are usually not driven daily but rather used for exhibitions, car shows, or occasional leisure driving.
• Historic or Special Interest Status: Some insurers consider cars with historical significance or limited production numbers eligible for classic car insurance

Stated Value vs. Traditional Car Insurance

Stated Value vs. Agreed Value Car Insurance

Benefits and Drawbacks of Stated Value Car Insurance

Benefits:

• Provides higher coverage than ACV-based policies, especially for classic or modified cars.
• Offers flexibility for owners to insure cars at a value they feel is appropriate.
• Premiums are often lower than agreed value policies, making it a cost-effective alternative for certain vehicles.

Drawbacks:

• Insurers may not honor the full stated amount in a claim, especially if the market value is lower.
• Depreciation can still play a role in the final claim payout.
• Not ideal for highly valuable collector’s vehicles, which benefit more from agreed value coverage.

Should You Choose Stated Value Car Insurance?

If you own a classic car, a modified vehicle, or a rare edition, stated-value car insurance can be a good fit—but only if you understand how claims will be handled. If you’re looking for guaranteed coverage of your vehicle’s full value, an agreed value policy might be a better choice.

Get Expert Advice on Your Car Insurance Needs

At Hitchings Insurance, we help Ohio drivers find the right coverage for their unique vehicles. Whether you’re insuring a classic car, a high-value collector’s item, or a customized vehicle, we’ll work with you to determine the best policy for your needs.

Contact us today to discuss your insurance options and protect your prized vehicle with confidence.