Insure Classic Cars With Special Policy

Got a classic car, like a 1960s-era Mustang or a gull-wing Mercedes? You could be paying too much to insure it.

Roughly half of classic car owners put their collectible vehicles on a standard auto insurance policy without realizing they could be paying too much for inadequate coverage, said Ford Heacock III, chief executive of Heacock Classic, a Florida-based insurer of antique and collectible cars.

Traditional insurance is based on the notion that a car's value will decrease over time. But a classic car is likely to appreciate.

When buying a classic car insurance policy, which is offered by dozens of specialized insurance companies, you and the insurer agree to the car's replacement value. That price will be based on your assessment of the car's value and the price the car has brought at auction and in collector's sales. If the car is destroyed, you'll get that agreed-to value without having to dicker about depreciation.

The reason premiums are lower is simple: Classic and collectible cars are pampered (and driven infrequently and carefully).

"At the heart of insuring classic cars is the idea that this is your baby and you are not going to do anything to hurt it," said Candysse Miller, executive director of the Insurance Information Network of California and an avowed car buff.

How much cheaper is classic car insurance? A State Farm spokesman said it might cost $470 annually to cover a 1968 Camaro with a traditional policy -- with a lot of caveats. (Specifically, the driver had 30 years of experience, multiple discounts and a perfect driving record.)

State Farm would cut that rate by about 20 percent to $380 annually if you mentioned it was a collectible car and that you planned to drive it mainly to shows and to show off, said State Farm spokesman Bob Devereux.

Heacock's classic car insurance company would charge even less for similar coverage -- about $290 -- and wouldn't even inquire about the specifics of your driving record.

These low prices come with plenty of restrictions, however. Heacock doesn't cover youthful drivers. (Don't apply if you're younger than 30.) The car can't be driven more than 5,000 miles a year, and it had better have a home in the garage.

You don't need an expensive antique to secure classic car insurance. If a car draws enthusiasts and is driven like a collectible, it probably can be insured like a collectible, said Miller.

If you get the right insurer, they are likely to be as enthusiastic about your car as you are. Often, they can help you find replacement parts.

"Sometimes when people find us for the first time, it's like a love fest," Heacock said. "They're saying, 'You mean I only have to pay $250 for insurance?' And we're saying, 'You mean you've got a '68 Camaro?' "

Contact Los Angeles Times staff writer at Personal Finance, Business Section, Los Angeles Times, 202 W. First St. 90012, or e- mail kathy.kristof@latimes.com.