How many times have we seen a movie scene where a someone or the other is fawning over his car as though it's his child?
Car enthusiasts pride themselves on the car that they drive and care for it as though it's a part of their family and not just a mere mode of transportation. This is especially true for owners of vintage cars who draw their purse strings together when it comes to taking care of their beloved cars.
Prices of vintage (produced before 1929) and classic cars (up to 1965) are escalating at the rate of 15-20 per cent every year.
Experts say, not more than 1,000-3,000 vintage cars exist in India today, valued at Rs 350 crore (Rs 3.5 billion). Some of the country's biggest collectors -- Pranlal Bhogilal of Ahmedabad, Sharad Shanghi of Indore and UB Group chairman Vijay Mallya -- own 350-odd vintage and classic cars between them, including the rare Mercedes 540 K and the Rolls Royce Silver Ghost, both valued at over Rs 1 crore (Rs 10 million).
But when you think about securing such priceless cars, insurance is something that first pops up into your mind. Classic cars often don't have modern safety features, and are thus prone to damage and possibly expensive to insure.
They do not have things like seatbelts, crumple zones, airbags, or any type of rollover protection, as these things were mostly added in the time since the generally accepted 'classic' period.
The maintenance and repairs can be surprisingly expensive, meaning that any serious owner should definitely think about having insurance.
Though available, providing insurance for vintage and classic cars is not a mainstream option among the many insurance companies in India. Insurance for your classic car is dependent on a number of factors, predominant among which are:
- Age -- Cars made up to 1904 are considered 'veteran cars,' while the Edwardian period stretches from 1905 to 1918, and the Vintage age lasts from 1919-1930. For the most part, cars are usually called 'classics' if they were manufactured at least 25 years ago, but even some relatively recent cars which are thought of as especially rare and collectible are thought of as classics. Therefore, it is important to know what definition of a classic or vintage car does the insurance company follows, since most have different definitions.
- Value of the car -- Policies can be sold based on the actual cash value of the car, in which case a book value with depreciation will be paid out by the provider in the event of a claim; then there is the 'stated value' policy, which can still depreciate, but is based on the owner's valuation for the car; and agreed value, which might not necessarily depreciate, and depends on a consensus between owner and provider.
It is important that you take into account the coverage which the insurance company provides. You need to check whether or not the policy liability covers public events; coverage including events and shows; coverage for damages incurred during restoration; and moveable premiums taking into account mileage, which naturally varies significantly for classic cars from year to year.
It is widely reported that classic car insurance is far cheaper than a modern car policy but it is important to be vigilant and well informed.
Also, it is important to understand that the condition and scarcity of classic car insurance can vary dramatically, and an owner's perception as to the value of his beloved car is often at odds with his insurer's valuation in the event of a claim.
It is always better to search for a specialist insurer; they are more likely to provide specialist assistance and provide a better rate.