In an accident with an older car, how is value determined??

Question

I am considering buying a "classic". Are they more expensive to insure?? And ALSO, if I were to get in an accident, how do they determine the value on that. I know about Blue Book/NADA, but I always thought that was more of a guideline for current cars??

Just curious.

Thanks!! :)

Answer 1

The expense in insuring a classic car is significantly higher than that of a current car as the cost to replace/restore this type of car is more than most cars on the road today (lack of availability of parts, etc.); however, if you are not driving the car and are only showcasing it then you would discuss adding a policy rider to your home-owner's or renter's policy for the value of the car (after it's appraised) with your insurance agent.  If you are planning to drive it, then it would be necessary for you to add it to your automotive policy (the cost varies depending on how frequently you drive this vehicle and driving a classic car promotes depreciation whereas showcasing it preserves the current value).  Remember, the cost of insurance depends on the cost of the item to replace at the time the item is being insured.

Answer 2

Classic car insurance is handled differently than regular insurance.  To insure a classic, usually an appraisal and pictures are required and the insured pays a premium based on the assessed (insured) value

Answer 3

I have a couple and they are insured through a "specialty" insurer. It is actually very inexpensive as most who have these cars are very careful and therefore have less claims. Regarding the value, the best thing to do is have a professional appraisal done. When estimating the value the NADA and other "guides" have very little influence on a classic car's worth. Traditional insurance companies use the value of comparable vehicles for sale in your area. Having an actual appraisal gives you the best chance of a fair settlement.  

Answer 4

This is a "it depends" answer.

Generally, vehicles "drop out of sight" as far as the listed value is concerned after ten years or so, and conventional insurers use the  "last listed blue book" value when you apply for routine insurance.  You could add a "rider" to a conventional policy to insure it for more as a "collector car - but that tends to get expensive fast, and most conventional insurance companies have little expertise in assessing a true value on collector cars.

There are insurance companies out there that specialize in collector and antique cars.  They can be helpful for figuring out a "fair market value" of an older car, as opposed to the "last listed value" of a Blue Book/NADA figure.  I found the links below, among many, by searching on "antique car insurance".  

Be careful, though, and look out for policy restrictions on using the car for every day.  Many collector/antique car policies will cover the car only if it's used for occasional shows, parades, and special events, but not for everyday routine driving.  If you want to use the car frequently, that may be an issue to think about.

If the car is to be a work-in-progress, and stored on your property while fixing it up, it could be covered under the home owner's insurance as a "household goods" addendum.  An appraiser will want to look at it though.

I've insured an antique car the above ways over several decades.  As always, it pays to do some homework and do price/feature comparisons.

Answer 5

the NADA/Blue Book is a guideline for all cars so the value in there will be what your insurance company will go by! :)