Date Published: 2023/10/23
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Owners of collector cars sometimes assume that the insurance policy they obtain for the vehicle will be like their standard car policy. This belief is one of the most common car insurance myths in Canada. The reality is that you need a specialised insurance policy for your collector car. Working with an agent who understands the unique insurance needs of collector cars is critical to ensuring you obtain the proper coverage for your investment.
You probably don’t drive your collector car to work every day or use it to run errands. Insurance agents know this, so they set up policies to protect against damage incurred while driving your classic car in a parade, to a car show, or another speciality event.
The limited use of your collector car and its high monetary value are two important considerations that determine how much you will pay to insure the vehicle. The make, model, and year of production for your classic car also matter. While your premium on your special vehicle is typically lower, you must also consider how rare it is and whether replacing it is possible.
The insurance policy for your collector car may impose limits on its use, such as only driving it to special events or storing it in a certain way when not in use. Setting the maximum number of kilometres you can go yearly is also common. The more you are willing to pay for your insurance premium, the less likely you will need to abide by these restrictions.
Another common misconception is that insurance companies treat all older cars the same. The first thing to understand is that the agency must agree that the vehicle you want to insure meets its guidelines for a collector car. A collector car is any make or model between 15 and 20 years old, while a classic car is between 20 and 30 years old. Once a vehicle is more than 30 years old, it meets the definition of an antique car for insurance purposes.
The Canadian government requires people to carry insurance on all vehicles they own, regardless of how often they drive them. However, coverage requirements and fault vs. no-fault auto insurance vary considerably between provinces. Ontario, where Orbit Insurance Services operates, is a non-fault province regarding auto accidents. That means that you maintain coverage if you take your collector car to another province and need to make a claim for damages.
You have more choices for insuring your collector car than you might think, including the three types of policies described below.
If you obtain actual cash value coverage for your collector car, you receive the vehicle's value at the time of your claim. Keep in mind that what your car is worth today will change throughout your ownership. Actual cash value can be a good option if you expect the value of your collector car to increase over time.
When you obtain this type of insurance coverage, you and your agent agree on a replacement value for your collector car before you sign any documents. You will receive the value you agreed to if you need to make a claim. Agreed value is unique to collector cars because owners often feel that the current market rate doesn’t accurately reflect the vehicle's value.
The dollar value of your collector car at the time you obtain an insurance policy, for it is what you receive if you make a claim on it later. The amount remains fixed, regardless of changes in the economy or the appreciation or depreciation of your vehicle. When you file for a claim, whoever you’re insured with can choose to pay the Stated Value or the Actual Cash Value, typically whichever is cheaper.
Orbit Insurance Services agents have been writing policies for collector cars for more than 40 years. We invite you to contact us at 844-929-4768 to learn more about coverage options for your unique vehicle now that you have read our myth busting collector car insurance tips.