Classic Car Insurance

Classic car insurance explained

For those who don’t know, collector car insurance is a type of car insurance that is specifically intended to cover the risks that classic cars face. Whether you bought a classic car for pleasure or investment reasons, this type of insurance is necessary to protect your high-value asset.

It is important to note that standard car insurance and classic car insurance are not exactly the same, which is why it would be a mistake to insure your classic car with a basic auto insurance policy. For this reason, BrokerLink offers car insurance policies that are specific to classic cars. We outline some of the most common types of classic car insurance below.

Classic car insurance: mandatory coverage

Whether you want to buy collector car insurance in Toronto or elsewhere in Canada, there are a variety of coverages available to you. Some types of auto insurance are mandatory, whether you drive a classic car or a brand-new car, and others are optional. Using Ontario as an example, the following four types of coverage are legally required if you want to drive your classic car in the province:

• Uninsured motorist coverage
• Liability car insurance
• Accident benefits coverage
• Direct compensation - property damage coverage

Since car insurance is compulsory in Ontario, driving without it is illegal. Even if you only intend to drive your classic car for part of the year, you still need to have a valid policy that meets local laws in your province. If you choose to drive your classic car without car insurance or with inadequate car insurance, you could face serious consequences. Penalties for uninsured driving in Ontario may include fines of up to $50,000, the impoundment of your vehicle, and the temporary suspension of your driver’s licence.

Without further ado, here is a breakdown of the four types of mandatory collector car insurance coverage in Ontario and how they can protect you.

Third party liability coverage

Third party liability car insurance is designed to protect policyholders who cause accidents. In other words, if you are driving your classic car and you accidentally rear end the car in front of you, you can file a liability coverage claim to help you pay for the cost of repairing the other driver’s car. Third party liability coverage may also pay for legal fees and medical fees resulting from an at-fault accident.

Accident benefits coverage

Accident benefits coverage covers the cost of medical attention if you get into an accident that results in bodily harm. Whether the policyholder was the injured party or it was someone else involved in the accident who was injured, accident benefits can still pay for medical bills and other related costs, such as lost income or funeral fees.

Direct compensation - property damage coverage

Direct compensation - property damage coverage comes into play if you get into an accident that you are not at fault for and your car is damaged. When you claim this type of coverage, you can receive a direct payout from your insurance provider to help cover the cost of repairing your vehicle.

Uninsured automobile coverage

Finally, uninsured automobile coverage comes into play if you get into an accident while driving your collector car and that accident is with a driver who is uninsured or underinsured. An uninsured driver is one who does not have car insurance, whereas an underinsured driver is one who does not have enough coverage to pay for the costs of the accident. Meanwhile, uninsured automobile coverage can also cover anonymous drivers, i.e. those whose identity you never learn because they flee the scene of the accident. The types of costs that uninsured motorist coverage can reimburse policyholders for include vehicle repairs and medical fees.

Classic car insurance: optional coverages

Now that you know what mandatory car insurance coverage looks like for classic cars in Ontario, let’s dive into optional coverages. There are a number of coverages that you can choose to add to your classic car insurance policy as endorsements or riders. Some of the most common ones are listed below.

Collision coverage

Collision car coverage is the first type of extra protection that you may want to consider adding to your classic car insurance policy. This type of coverage can pay to take your car into a repair shop or replace your collector car if you get into a serious accident that damages your car. Whether the cost of repairs is extensive or your car is deemed a write-off, collision coverage can help you pay for the damage. Please note that collision coverage can be claimed whether you were at fault for the accident or not and whether the damage was caused by colliding with another car, animal, or grounded object.

Comprehensive coverage

Comprehensive car coverage, also known as parked car coverage, is extremely worthwhile for classic car owners. This is because many classic car owners choose not to drive their cars year-round. This means that your car is in storage for part of the year, usually the wintertime. Although you might think that your car isn’t at risk while in storage, the reality is that there is still a lot that can go wrong. For instance, your collector car could be stolen out of your garage or a house fire could break out and damage it. If your classic car insurance policy does not have comprehensive coverage, you will not be covered against any of these risks, meaning you would have to pay to take your car into a repair shop or replace your car out of pocket. However, by adding comprehensive coverage to your insurance policy, you can be protected from a whole host of perils, such as theft, vandalism, fire, water, falling and flying objects, explosions and riots, and other weather-related incidents.

Accident forgiveness coverage

One more type of optional car insurance coverage popular among collector car drivers is accident forgiveness. Accident forgiveness is additional coverage that can be added to your car insurance policy as an endorsement, to protect your driving record and to help prevent your insurance premium from increasing if you have an at-fault accident claim. Note: coverage and eligibility varies by province.

Is classic car insurance necessary?

If you intend to drive your classic car, then yes, purchasing car insurance is necessary since it is a legal requirement in every Canadian province and territory. That said, not all types of insurance coverage are required. Consult with a BrokerLink insurance advisor or do some independent research to determine what types of car insurance coverage you are legally required to have if you want to drive your collector car in your province.

On the other hand, if you do not intend to drive your classic car - it is merely a showpiece in your collection that will remain stationary, you are not legally required to purchase coverage. That said, it is still recommended that you do so due to the risks that parked cars face. As mentioned above, your classic car could still be stolen or damaged, even if it’s never driven. Comprehensive coverage is the best type of car insurance coverage for parked cars, as it can protect cars from risks like falling trees, fires, theft, vandalism, and more.

Another reason that collector car insurance is necessary is that it will protect your car from the risks of the road. As with any type of car insurance, its primary purpose is to keep drivers safe. That’s exactly what classic car insurance does. It offers security against financial losses should you get into an accident or another type of incident related to the road.

Classic car insurance vs. standard car insurance

Classic car insurance and standard car insurance may share a lot of the same coverages, such as third party liability coverage, uninsured automobile coverage, accident benefits coverage, direct compensation coverage, collision coverage, comprehensive coverage, and accident forgiveness coverage, to name a few. They may even share the same purpose: to protect drivers from the cost of losses or damages relating to driving, such as bodily injury and property damage. However, there are also a few key differences between them.

First, standard car insurance is designed for cars that are driven regularly throughout the year. Classic car insurance, on the other hand, is not. This is due to the fact that many classic car owners only drive their classic cars for a small portion of the year. Classic cars are rarely a person’s primary vehicle. Insurance companies recognize this and they set collector car premiums accordingly. Insurers understand that classic car owners will not spend nearly as much time on the road as drivers of regular passenger cars. In turn, this reduces their odds of getting into an accident, which is why an insurance company is often willing to offer them a lower rate. To find out more about the costs of insuring a classic car or to receive a free classic car insurance quote, contact BrokerLink.

Second, regular car insurance policies typically feature actual cash value coverage, which means that if your car is totalled and deemed a write-off, the payout you would receive from your insurance company would be the equivalent of the value of the car, adjusted for depreciation. Since most modern cars depreciate in value quickly, this payout is generally far less than what the owner originally paid for the vehicle. However, unlike modern cars, collectors vehicles do not depreciate in value with age. Quite the opposite. They increase in value the older they get, assuming they are well taken care of. As such, purchasing a regular car insurance policy with actual cash value coverage, rather than a car insurance plan that takes into account the growing value of collector vehicles, could result in a major loss of money if the vehicle was ever stolen or totalled.

Classic car insurance qualifications

Now that you know a bit more about classic car insurance, you might be interested in purchasing a policy. However, just because you own a classic car doesn't mean that you will automatically qualify for classic car insurance. There are a number of rules and restrictions surrounding car insurance that can make qualifying for classic car insurance a bit more challenging than you may have thought. Unlike new cars, there is an age limit for classic car insurance that you must be aware of, as well as restrictions on annual mileage and more. For example, most insurance companies will not issue classic car insurance to a policyholder under the age of 25. In addition, the classic car usually cannot be your primary vehicle and you cannot drive it more than 8,000 kilometres each year. Further, only specific types of classic vehicles will qualify for classic car insurance. Such vehicles vary from company to company, though they typically include:

• Collector and classic cars manufactured in 1979 or before
  • Antique – cars built between 1896 to 1948
  • Classics – built between 1924 and 1948 featuring custom coachwork
  • Post-War – popular cars manufactured in the years following World War II
  • Muscle Cars – American made, V-8 engine cars made between 1968 and 1972
• Collector trucks and SUVs that are 25 years or older (stock), or 15 years or older (modified)
• Military vehicles – retired, demilitarized vehicles from 1985 and older
• Classic and antique tractors – restored vintage models 30 years of age and older
• Car trailers for vehicles and street rods
• Retired commercial vehicles that are 25 years or older
• Classic vehicles under construction for active restoration projects

Oppositely, the following types of classic vehicles generally do not qualify for classic car insurance:

• Commercial-use vehicles
• Motorcycles or scooters
• Vehicles used for off-roading, camping, or utility purposes
• Vehicles with 700 horsepower or greater (no matter whether they've been manufactured or modified)
• Dune buggies
• Motorhomes or recreational homes
• Vehicles used for racing or autocross events
• Vehicles that are highly customized for appearance and suspension

To learn more about whether your car will qualify for this type of insurance, contact BrokerLink today.

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Tips for buying a classic car

To help your classic car buying journey go as smoothly as possible, follow the tips below.

Do your research

If you want to find the right classic car for your daily driving needs and budget, you will need to do lots of research. Not only should you search up various types of classic cars online, but we also recommend attending classic car shows in your area and joining classic car groups online. Classic car shows give you an unparalleled opportunity to see a classic car you’re considering buying in the flesh. You might even have a chance to drive it. Plus, by attending this type of show or joining a similar group online, you can ask other classic car owners about their thoughts and opinions on certain models. This will allow you to gain valuable insight into what it’s like to own and drive a classic car.

Ask the seller lots of questions

Since most classic cars are sold by independent sellers, it’s important to ask them lots of questions. This is the best way to gauge the condition of the car, as well as to understand how well the previous owner took care of the car, why they are selling it, and the logistics of transferring ownership of the car. A few questions that we recommend asking the seller before finalizing your classic car purchase are:

• What is the purchase price?
• Do you hold the title to the car?
• Do you know how many other people have owned this vehicle in the past ten years?
• Do you have the vehicle’s maintenance records and if so, can I have a copy?
• How often have you been driving the car?
• Has the car been modified, and if so can I have the details of these modifications?
• Do you know of any minor or major issues with the car, either presently or in the past?
• Why are you selling the car?

Hire a professional mechanic to inspect the classic car

Hiring a professional mechanic to inspect the classic car is a must before buying it. This is good practice when buying a car from any independent seller, but especially so when buying a classic car, which are generally prone to more issues due to their age. Before scheduling an appointment with a mechanic, ask the seller if they are comfortable with you doing this. If they say no, this could be a red flag or an indication that something is wrong with the car. The reality is that if you don’t have the car inspected, you could run the risk of buying a classic car with serious issues that cost you tens of thousands of dollars to fix, if not more. Assuming you intend to drive the car and want it to be roadworthy, do not skip this important step.

Buy classic car insurance coverage

One final tip for buying a classic car is to remember to buy classic car insurance coverage. Before finalizing your classic car purchase, we recommend consulting with an insurance advisor at BrokerLink to make sure that the vehicle you want to buy will qualify for classic car insurance. From there, a BrokerLink broker can offer advice and insight into the best types of coverage for your car. They can also give you tips on how to keep your rates as low as possible. Plus, brokers know how to shop around on behalf of their customers to get them the best possible rates so you can save money on coverage.

Get in touch with BrokerLink

Discover more about classic car insurance by contacting BrokerLink today. One of our licensed insurance advisors would be happy to explain how classic car insurance protects you, how it differs from standard car insurance, the most common car accidents that involve classic cars, and how much car insurance costs per month in Ontario. Of course, as a full-service brokerage, we can also offer you a classic car insurance quote - completely free of charge. All BrokerLink car insurance quotes are accurate, reliable, and can be obtained on our website using our online quote tool. Contact BrokerLink to begin your classic car insurance journey.

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