What type of insurance do you need for your classic car?

Driving Right: Getting Classic Car Insurance

A specialty insurer will sit down with you and negotiate an "agreed value" policy based on your car's appraised market value or on auction prices for similar cars. Some policies even include a clause that bumps that value up a certain percentage every year. This is the opposite of regular policies, which pay out only the "actual cash value" of the car -- a value that goes down over time [source: Drivesteady.com].

To qualify for classic car insurance, your roadster has to be collectible or antique. Different companies have different criteria for determining what they consider to be classic. Car models older than 20 years used to be considered classics, but today, some older cars are not seen as collectible because of high production runs in the 1970s and 1980s and lack of interest in the designs of cars of that era. At the same time, a later model might be called a classic if it's a limited edition or an exotic vehicle, like a Ferrari F40 or a Corvette ZR1. Street rods, muscle cars and low riders may also be eligible for classic car insurance [source: Hagerty.com].

The policies do come with restrictions. For example, the amount you can drive will be limited -- typically to no more than 5,000 miles (8,046 kilometers) a year [source: Kristof]. You must own another vehicle for daily use, and you'll have to store your classic in a secure garage. Additionally, you may not be eligible for classic car insurance if you're younger than 30, and even if you meet the age requirement, the insurer may require you to have a clean driving record [source: Drivesteady.com].

There are a number of companies that specialize in classic auto insurance. You can find them online or by asking members of your local car club. Buying a classic car policy is a win-win proposition: You get the coverage you need and save money in the bargain.