Team AckoJul 22, 2021
Having car insurance protects your car as it covers the cost of damages due to an accident or in case of theft of your car. As per the law laid down by the Central Government, third party liability cover is mandatory, while the Own Damage (OD) or comprehensive insurance is optional.
But what if you own a vintage or a classic car that requires extra effort it keep it in excellent condition? The simple answer to this query is – insure it.
As a classic or vintage car collector, you understand the value of your car, specifications, and features which sets it apart from regular or new cars. You also know that old car insurance will take care of your car in case of a mishap or theft. But is it similar to insurance for new cars? No. It’s not.
Before we understand the financial aspect of vintage or classic car insurance, let’s learn how cars are categorized under this category.
The basic difference is the age of the car. However, these are broadly categorized as vintage, classic, and antique. The Vintage and Classic Car Club of India (VCCCI) is the main authority which categorizes cars based on the manufacturing date. Here are the main differences which set each other apart:
Classic Cars: A car is as ‘Classic’ if it’s manufactured between 1940 and 1970, generally it’s between 20 to 40 years. Classic cars are expected to be closer to the original manufacturer’s specifications, design and features. This is because the car’s value depreciates with any changes or modifications to the car. It may even lose its tag of a classic car if there are too many changes.
Antique Cars: The categorization of a car as ‘Antique’ varies from different guidelines. One of the main aspects which differentiate it is that the car should be more than 45 years of age. Similar to classic cars, antique cars are also expected to be maintained as per the original manufacturer’s design, features and specifications.
Vintage Cars: Just like classic cars and antique cars, vintage cars’ definition will vary between different guidelines. While one of the guidelines categorize cars which are manufactured between 1919 to 1925 as vintage cars, some consider cars built between 1919 to 1930. However, the value of this type of cars does not depreciate after modifications or changes, unlike the other two types of cars.
Although these cars are broadly categorized as Vintage, Classic or Antique, vehicle insurance companies have their guidelines while categorizing old cars. Ensure you check with the insurance company what are the guidelines while differentiating the type of car. Also, to be eligible for old car insurance, a car has to be certified or authorized by the VCCCI along with the proof of age of your car.
While third party insurance for vintage or classic cars is mandatory in India, a comprehensive policy will protect your car against theft, fire, weather damage, etc.A regular or new car insurance policies are offered based on Insured Declared Value (IDV), this is the value of the car after depreciation. However, for a car categorized as vintage or classic, the insurer will have an expert surveyor sent to access and prepare a report which includes car valuation, cost of spare parts, and the potential cost of repair and availability.
The vintage car insurance is broadly based on the below factors which affects the premium you pay towards the coverage:
Age of the Vintage Car: This is the main factor insurance companies look for when assessing your car for vehicle insurance. Ensure you have all the documents about the manufacturing year or date of your car.
Current Value of the Vintage Car: The Insured Declared Value (IDV) or the sum insured for an old car is calculated slightly different from regular car insurance. Since the guidelines differ from one insurance company to another, you need to reach a mutual agreement with the insurer about the IDV as the insurer is liable to pay the sum insured in case of total damage to your car.
Expected Repair Cost of the Car: Maintenance and repair of a vintage car are usually higher and the insurer will assess how regularly does your car require maintenance and repair. This is one of the factors which will determine the car insurance premium.
Kilometers Driven: The common factor between new car insurance and vintage car insurance is the kilometers driven. This also affects the premium of old car insurance.
The value of the car depreciates over time and the insurance company fixes IDV based on the standard depreciation rates set by the Indian Motor Tariff Act for the first 5 years. However, after 5 years, it’s mutually agreed between you and the insurance company.
Since these cars are older vehicles, ensure that the sum insured or the IDV is as per the actual value of the car. Choose an insurance company which offers the closest IDV to the present value of the vintage car. However, this could come at a higher premium.
Here are some FAQs about old car insurance policy:
How do policy payouts work for vintage cars?
The process of policy payout for old car insurance and new car insurance is the same as both are contracts with listed terms and conditions unique to your vehicle. While the third-party cover is mandatory, Own Damage (OD) cover is optional. Hence, based on the agreed IDV and any Add-ons, the policy payout will differ between cars and the insurance policy.
How do I find the right vintage car insurance company?
Since these vehicles require regular maintenance and repairs, choose an insurance company which offers the right IDV and can settle claims on time.
How is the IDV determined for vintage cars?
For cars above 5 years or cars which are considered as Classic or Vintage, the IDV is mutually agreed between the insurance company and the car owner.
Is third-party insurance cover required for vintage cars?
Yes, it’s mandatory that these cars are also covered under the liability or the third-party insurance policy as per the law in India.
How can a car be eligible for a vintage car insurance policy?
Once your car is certified by the VCCCI, your vehicle is eligible for an old car insurance policy.
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