Re: How does car insurance work for Packards or any antique car?

Posted by DrewLA On 2016/3/4 12:50:11

The primary difference between most classic car insurance policies and your "daily driver" policies is the coverage limit for collision and comprehensive (and uninsured motorist). Some of the terms and minimum coverage requirements vary by state, but almost all policies have those coverage categories in common. Classic car policies, the good ones, at least, are Agreed Value policies; you and the insurer have agreed on the value of your vehicle/the amount you'd receive in the event of a total loss. Daily driver policies are Actual Cash Value (ACV) policies and pay you the insurers estimation of the market value of your car LESS your deductible. ACV policies work well for new cars because they depreciate somewhat predictably, the market is large enough to generate solid estimates of value, and identical model vehicles are pretty much identical. That's obviously not the case with old cars, so most of us prefer to know what we'll get if we have a total loss.

Indeed, as long as the damage is less than the coverage limit, they'll cover the repairs to your car, often the complete cost because many classic car policies have a $0 deductible. Some insurers, such as Hagerty, have experts dedicated to sourcing those hard-to-find parts. They'll pay to put the car back as it was, provided that cost doesn't exceed the agreed value. Of course if the cost of repairs does exceed the limit you'd set, then they'll just write you a check for the agreed value, so it's important to set that value accurately and to review it regularly.

There are some limitations on use, and going to the grocery store may be frowned upon by some of the more restrictive insurers (the commonality in all policies I've reviewed is that you can't use your car for daily driver duty). In that case you'd still be covered for liability, but you'd be in violation of your policy agreement, which could result in a bit of a fight for coverage. Hagerty is the market leader and their restrictions make sense - limited daily use is permitted, you can even drive your car to work occasionally if you want, but it can't be your everyday car. It's important to know exactly what your insurers requirements and restrictions are so you don't run afoul of their limitations, but in general the policies are set up to cover all perils you'd likely experience.