All insurance companies offering collector car insurance are not alike, nor are their policies. As an investor, your peace of mind relies on an insurer’s understanding of the valuation of your cars; and your ability to enjoy your vehicles depends on the company’s understanding of how these cars are actually used. So the question becomes: Can you, the collector, determine these criteria of a good insurer simply by looking at its policy?

MILEAGE
A great collector car insurer uses its years or decades of experience to anticipate the client’s likely touring and driving habits. Some companies limit a vehicle’s annual mileage, but the best do not. An owner can easily exceed some policies’ limits simply by going to car shows, club cruises and simple pleasure drives well before the season ends. If this happens to you, you will be stranded without coverage. If you are a driver, buy a policy with unlimited mileage.

GLOBAL COVERAGE
Another consideration is whether you will be taking your collector car out of the country. Most policies will cover you in North America, but what if you want to tour Europe, South America or other parts of the world? Look for a policy that has true global coverage.

DIMINUTION OF VALUE
Another aspect peculiar to collectible vehicles is that the more original they are—meaning as built from the factory—the more valuable they are. Cars are built from components that are numbered and even dated with codes that reveal they are original to that vehicle. If any of those components are destroyed in an accident or stolen from the vehicle, that vehicle’s value may be severely diminished. Not only that, but if a very low-mileage vehicle is stolen and taken for a joy ride, that vehicle is no longer as valuable, simply because it now has more miles of use!

This type of loss is real, and is called diminution of value. Look for this coverage in all collector car policies. If it is listed under “exclusions,” look for another insurance company. Be aware that some states do not recognize diminution of value, so it may not be available to you. AIG is an example of a great company that covers diminution of value.

THE NEXT STEPS
First, make sure your insurance company is secure and understands collector cars. Next, determine how and how much you want to use your car, anticipating annual mileage. Then do an apples-to-apples comparison among the policies of your insurance candidates to discover their differences. Some of these may be hidden, but if you persevere, a rewarding collector car experience will be yours to enjoy.