Classic Car Insurance Guide

There is a lot of effort that goes into finding out a rare classic car. Then there is enough money that goes into buying one, take for granted the repairs and restoration. A classic car is a priceless possession, and its, worth is well known to the person who owns it. But then again a classic car cannot be insured the same way as a regular car. This is because; these are valued much differently than the newer vehicles.

Classic cars are investments which hold a special value and a special expertise is required to insure them. Thus, when not every car insurer can offer classic car policies, there are several niche insurance companies which offer specialist schemes for insuring these types of cars. Besides, there are different types of cover for a classic vehicle. The main levels are three in number. These three levels of coverage are discussed as follows:

Third party cover

Third party cover forms the basic level of classic car insurance cover. This coverage includes settlement of all legal obligations related to injuries (including the passengers) and damages caused to the driver, the passengers or any other person related to the accident and/or their property. The coverage does not pay for the driver's injuries or the car's damage but the owner can claim against the policy of the driver if the accident was the result of their fault.

Third party, theft and fire cover

This also acts like the third party cover. The only difference is that this coverage also includes the payment for the repairs or replacement of the owner's vehicle in case of theft or fire damage. The coverage is the most suitable in cases where it is written off and the replacement wouldn't cost so much.

Comprehensive cover

Comprehensive policy makes the same coverage as the third party, theft and fire besides an additional coverage. This additional coverage includes the payment for the damages caused by the owner. The comprehensive scheme also comes with several other additional like personal belongings, stereos, windscreen, personal injury or death and foreign travel cover.

While comprehensive car insurance policy covers most of the claims, it is also the costliest. One best way to make a choice for your cover is by measuring up the insurance costs against the maintenance or replacement costs of your car. Read on this classic car insurance guide article for more information.

Calculation of Premiums

A number of factors are taken into consideration when calculating the cost of the premium. One of the most important factors is car grouping. In this system, each car is grouped based on rates of 1to 20. The grouping is done depending on the availability of spare parts of the classic car, the cost of the vehicle and its parts, security features, number of repairs, and performance. A higher rating gets more premiums. The cost of premium also varies with the number of drivers as well as the age of the driver. Insuring more drivers means more expensive premium. Though older drivers have to pay lesser premiums than their younger counterparts, the premium rate goes up as one ages beyond 70 years. Also, women have to pay comparatively low premium. Urban drivers need to pay more premium than country drivers. Again, owners keeping their cars on the street or driveway will have to shell out more than the ones keeping cars in the shades of garage. In some ways, modification of the car and running it for more miles can cost you extra for premium. A conviction record or a bad claims record can lead to the hiking of the costs.

Understanding Documents

When you are insuring your car you will be given documents like a cover note, a schedule, the policy document and a certificate. While the cover note is the temporary proof of the policy before the arrival of the certificate, the schedule explains the various sections of the policy, the endorsements and the excesses. Policy acts as the general document holding coverage on all the three levels, the additional benefits and the terms and conditions of the scheme. The certification is the legal proof of the insurance cover.

Voluntary Excess

A compulsory excess can be levied on your policy based on your insurance plan, you car type and your claims history. You have to pay this excess amount towards a claim. Payment of a voluntary excess can avail for you a discount on the premium cost.

No Claims Bonus or NCB

The 'No claims bonus' is awarded to the owners each year for every claim free annual insurance. The greater the number of 'no claims', the more is the discount on your insurance premium. The typical discount is 65% but in case of some policies the reward is more. Also, on reaching the maximum number of NCB, the owner will be allowed to protect the NCB too.

Security Devices

Not every security system is eligible for a discount. Insurers usually specify that each security device be tested and approved by an organization called Thatcham.

Driving Courses

The young drivers who are required to pay high premiums can now save money using the Pass Plus training course. This certification training spans six months. Many insurers often offer discounts in the course fee.

New -For- Old Cover

When you car is stolen or has been damaged, the maximum payment that a policy will be equal to the market value of the car during the event of theft or damage. In this case, a new car can have a loss up to 30% of its worth in the first year. However, a way to avoid this problem is by opting for the new-for-old cover. Your stolen or damaged vehicle will be replaced with a brand new car within the first year of the event. However, the extent of this benefit varies from insurer to insurer.

Courtesy Car

You can avail of a courtesy car by the insurer for the time your classic vehicle is being repaired. Usually this facility comes under the comprehensive coverage, but then again not all insurers offer this benefit. In many cases, the courtesy car to be provided can also be subject to availability.