Insurance for Collector Cars Doesn't Have to Cost a Bundle


If your passion is classic cars, nothing beats rolling your '57 Chevy Bel Air convertible out of the garage for a Sunday spin along the ocean.

After all, when you invest in a collector car you want to savor the admiring gazes you attract when you're behind the wheel of your super-cool ride. But before venturing out of the driveway for that monthly trip, make sure you've got your precious vehicle insured.

Whether out for a joy ride or on your way to show off your Chevy at a classic car event, if driven to the event, under California law your collector car must be registered and insured.

With more than 14 million pre-1976 autos in the U.S. today, "classic car insurance has become a $400-million-a-year business in the U.S.," says Kim Seguin of JMPR, a Woodland Hills public relations firm whose clients include many automotive-related companies.

However, since most collector cars aren't used for everyday driving, the cost of insuring them under a standard actual cash value insurance policy seems prohibitive to many owners. They question paying high premiums and having the value of their car depreciated for insurance purposes, when their treasure spends most of its time in the garage. And where it is actually appreciating with age.

Their salvation may lie with a niche of specialty insurance firms catering to collector car owners. Whether you own a '56 Ford Sunliner, a Jaguar XK120, or a '32 Ford hot rod, companies such as Hagerty Classic Insurance will insure it under policies designed specifically for collector vehicles.

McKeel Hagerty, president of the Traverse City, Mich., insurance firm estimates there are nearly 3 million uninsured collector cars out there, and "owners of a '65 Mustang, for example, probably figure it's going to cost them $1,000 a year to insure. So, they decide they'll keep it uninsured.

"It's illegal in California, but they do it anyway. They figure the one or two times in the summer they decide to take the car out and get ice cream, they'll just throw a license plate on it from their regular car and take the risk."

In truth, adds Hagerty, the owner of that Mustang can insure the classic for about $95 a year, get the car legally registered "and actually go out and enjoy it . . . without risking a ticket."

Hagerty, whose clients include celebrities such as Steven Spielberg, says insuring a '57 Chevy Bel Air convertible, valued at $35,000 would cost about $250 a year, including comprehensive collision and full liability with zero deductible.

That's assuming, of course, you're only driving the car occasionally. Hagerty does not impose mileage restrictions, but warns that if you start using a classic as a daily driver "we probably wouldn't want you as a customer anymore."

Even some standard insurers such as AAA have felt demands for specialty car insurance, according to Jeffrey Spring, spokesman for the Auto Club of Southern California.

AAA began offering collector car insurance in June. Spring estimated its coverage for a '57 Chevy Bel Air, although not a convertible, and valued at $20,000, would cost $133 a year. They also add an "inflation guard" of 2% per quarter.

Under AAA requirements, the vehicle must be at least 15 years old, garaged when not in use, and driven no more than 2,500 miles a year.

The cult of collecting is growing in popularity as a new generation of followers with more disposable income find they can now afford to buy classics from the '60s and '70s as well as muscle cars and hot rods.

"Now baby boomers can afford to buy the car they remember," says Matthew Orendac, marketing director at Condon & Skelly Specialty Auto Insurance in Maple Shade, N.J.

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