Classic car - what kind of insurance do you need?

Do you have a muscle car in the garage? Or maybe an older model Mustang, Corvette, Volkswagen or Cadillac? If so, what are you doing about auto insurance for your classic car?

For the sake of convenience, a lot of people simply put their "play" cars on their regular car insurance policy, not realizing they are paying much more than they should for coverage. If you own a car that has appreciated in value substantially due to physical restoration or reconditioning, or you have the car as an investment or collector's item it is likely eligible for special coverage that may bring your insurance costs down significantly.

Some insurers, for example, allow its customers to add an endorsement to their regular auto insurance policy to cover a classic car that is only driven for shows, parades, club activities and the like. The vehicle will enjoy the same level of coverage as the other cars on the policy - liability, physical damage, underinsured/uninsured motorist and personal injury protection - at a reduced cost.

Keep in mind though, you'll need to do a good job of keeping the number of miles the vehicle is driven per year down. For most owners of collectible cars, that is not a problem. They typically truck their vehicles from place to place, then only drive them short distances when they get to their destination - typically a car show or race track.

So how much money can you save if you decide to stop carrying full coverage on your classic car and instead add an endorsement to your current car insurance policy?

Insurance agents say that will depend on the year, make, model, vehicle identification number (VIN) and whether the driver has been involved in any accidents. The insurer also needs to know the value of the car, the number of miles on it and where the vehicle is kept overnight. They will also ask for pictures of the vehicle.

In the current economy, people are trying to cut expenses as much as possible. So why pay more than you should to insure the classic car you only drive a few times a year? There are surely better uses for the money you are going to save.

Courtesy of ARAcontent