Does your jaw drop when you see a chic car zooming past you? But what if it is a vintage car than a regular high-end model vehicle? You will have more reasons to turn your eyes to it, isn’t it? After all, the charm of cars from 1900s’s is quite different. Because of the rarity of such car models and their spare parts, the associated cost of service is more. It is said that there are about 3000 vintage cars today in India.
Owning a vintage car is a matter of pride and prestige, but it also comes with a higher cost of service, motor insurance, and maintenance. Only car collectors and enthusiasts will understand the real value of such cars, this is why they are prepared to take care of the vehicle, even if it asks a higher amount of spending in form of car insurance.
Categories of Old Model Cars
Before we understand the difference between vehicle insurance for regular and vintage cars, let us understand the classification for old cars.
- Classic Cars: These cars are 20 to 40 years old. According to the Vintage and Classic Car Club of India, classic cars were manufactured after 1940 and up to or before 1970. These vehicles must be as close as possible to their original specifications, features, and designs. If major modifications are made to classic cars, their value can fall significantly.
- Antique Cars: Cars that are at least 45 years old are antique cars. These are also expected to remain as close as to their original features, designs, and specifications.
- Vintage Cars: Cars that were manufactured between 1919 and 1930 are categorized as vintage cars. The value of such cars, unlike the classic and antique versions, does not fall given any modifications.
While these are how older car models are categorized, several insurance companies may use different definitions for vintage cars. Sometimes, antique and classic cars overlap in terms of definitions, just as vintage and antique cars do. Due to scarcity and royalty of these car models, they are of high value, and a relevant insurance is important to protect them if they are driven often or used in exhibitions/special events.
Types of Insurances for Vintage Cars
Below-given are different types of motor insurance policies you can opt for vintage cars.
- The insurance cover depends on the car’s current monetary value.
- An ‘Agreed Value Policy’ is a car insurance that is based on the value agreed upon between the insurance company and the car’s owner.
- A ‘Stated Value’ insurance plan is where insurance cover and cost depends on depreciation deducted according to the owner’s perception about the car’s value.
Insurance Cover for Vintage Cars
You must be wondering if the insurance terms and conditions are different for vintage cars compared to regular cars. Let us first understand about third-party liability cover. This is necessary for all registered cars, be it a new car or a vintage car. Premium here is based on engine displacement capacity as specified by the insurance regulator.
Below-given are ways the insurance cover for vintage cars is decided:
- Own-Damage Insurance: The difference in insurance cover between regular cars and vintage cars is seen in own-damage insurance. The own-damage cover for regular cars is based on the IDV (Insured Declared Value). It is calculated upon the vehicle’s price as listed by the manufacturer, minus the depreciation. Thus, IDV is the maximum assured sum that the owner will receive given complete damage or theft of the vehicle.
- Depreciation Value: As per the Indian Motor Tariff, vehicles up to six months old are accounted with 5% depreciation to calculate the IDV. The same can be up to 15% for vehicles that are less than 1 year old. For cars over five years old, depreciation increases to 50%. If the car is older, then the depreciation value is mutually decided by the vehicle owner and the insurer.
- Valuation Report: So how to arrive at sum assured for vintage cars? The insurer will look at the vehicle’s certification and documentation. The car must be registered with the Vintage and Classic Car Club of India. The insurance company may appoint a surveyor to prepare the valuation report. The valuation can be done by the Vintage and Classic Car Club of India, and the insurer can accept this report as well.
- Other Factors: After the valuation, the insurer takes into account factors such as cost of repairs and spares for the car model. As it is a vintage vehicle, services and spares for it may not be readily available. This may increase the premium cost for older models, as many times spare parts for these have to be imported, and in some cases, have to be newly prepared. Once the insurance company and vehicle owner agree on a value, the own-damage cover is decided.
NOTE: When comparing motor insurance policies online or at any other source, insurances for vintage cars and its information may not be readily available. This is because value of each is different from a case to another. So, always enquire with the insurance provider if service and cover for vintage cars are available with them or not.
- Pro-Rated Premium: Many times, vehicle owners may sign up for an own-damage cover for a short-term only, especially during special exhibitions and rallies. In such instances, insurance cover can come at pro-rated premium. This is as per the ‘Endorsement 31’ of the Indian Motor Tariff. It accommodates additional cover for events such as rallies and exhibitions. The premium is pro-rated because the own-damage cover for the cars could be costly, as service and spare parts are expensive.
So, we can conclude that the process and benefits of vehicle insurance are almost the same for a regular car and a vintage car, with differences in premium value because of the age, condition, availability of service/spare part for older and elite cars. You must compare the motor insurance policies for vintage cars and check out their features, especially the extent of cover for damages and services, before picking the right one.