by Colette Georgii

Created on: July 02, 2007   Last Updated: November 08, 2009

When insuring your classic car, you will want to get the best insurance deal possible and going to the same insurance company that insures the car you are already driving will usually not give you the best deal in car insurance. The best way to get the best insurance for your classic or collectible car is to go to a specialty insurance company that specializes in insuring classic cars.

Standard insurance companies base premiums on depreciation

The main reason a standard insurance company will charge you more is due to depreciation. Standard car insurance is based on depreciation, however classic car insurance takes a different route, since the classic car, often although old does not depreciate in value but accelerates in value. Standard insurance companies will only consider the age of the car which is related to depreciation.

Your standard car insurance is based on depreciation or Actual Cash Value (ACV). The value of your driving car is computed by determining the amount of depreciation. As soon as it is one day old it begins to depreciate in value and every year the value of your car is decreased. So standard insurance bases the value of a car on how old it is. The older it is the more it has depreciated in value. Subsequently the higher your premium, so you just don't want to insure your "old" classic car by depreciation standards.

Specialty insurance companies compute premiums on Agreed Value

The specialty insurance company will compute the value of your classic car, not by depreciation but by Agreed Value. It will usually base the annual premium on base value of the car according to stock original plus what the costs were for parts and labor. With Agreed Value there is no depreciation.

Therefore with the specialty insurance company your classic car is ageless and the annual premium is lower than the standard premium would be that is based on depreciation or the value of the car plus age.

Cars insured by the classic or specialty insurance company

Classic Insurance companies not only insure the classic or antique car, but today they insure all collectible cars such as the

*hot rods or street rods,

* muscle cars

* customs

* vintage pickups

* vintage racers

* sports cars

* 70's cars

* exotic cars - a brand new car always regarded as a collectible

Classic car insurance vs standard car insurance

Even though there are some standard insurance companies that offer classic car insurance, it is better to go with an insurance company that offers exclusive classic

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