Vintage cars are a rare sight in India and it is said that only a few thousand cars from such collections are left. Given the beauty of vintage cars and their scarcity, their value is high and so is the car insurance policy that covers them. Like any other regular car that is manufactured recently, vintage cars are also required to be covered under an auto insurance policy as per the Motor Vehicles Act, 1988. Most car insurance companies typically offer third-party insurance and comprehensive insurance. While the former covers and any legal liabilities that the policyholder may face for the damages he/she caused to a third party, the latter covers third-party liability as well as own damages i.e. damages caused to the policyholder’s own car. While the coverage for third-party liability remains the same for vintage cars, the coverage for own damages goes through a slightly more elaborate process.
Definition of vintage, classic,and antique cars
Insurance companies differentiate between cars based on age. Here are the differences between vintage, classic, and antique cars:
- Vintage:Cars that were manufactured between 1919 and 1930 come under this category. According to the Vintage and Classic Car Club of India (VCCCI), cars manufactured before 1940 are classified as vintage cars.
- Classic:Classic cars are those that were manufactured during the time period between 1940 and 1970 i.e. cars that are about 20-40 years old. Owners of classic cars are advised not to make too many modifications to the car and maintain it as close to the original as possible so as to prevent a decrease in the value of the car.
- Antique:Antique cars are mostly cars that are around 45 years old. In this case, as well, too many modifications would lead to a drop in the value of the car.
Insurance for vintage cars
As mentioned earlier, the regulations with regard to third-party car insurance applicable to modern cars are applicable to vintage cars too. The cost of third-party insurance is guided by the Insurance Regulatory and Development Authority of India (IRDAI) based on the engine capacity of the vehicle.
The difference lies in the coverage for own damages. In the case of the latest cars, the cost of comprehensive car insurance is fixed by the insurance company. The Insured Declared Value (IDV) is the maximum amount that can be claimed under a comprehensive insurance policy. It is calculated taking into consideration the manufacturer’s listing price and the time-based depreciation. The insurer decides the premium payable based on the IDV.
In the case of vintage cars, however, the IDV is decided differently.
How to calculate IDV for vintage cars
Since the value of vintage cars does not dip the same way it does for the latest cars, the sum assured is calculated by following a different procedure. A surveyor of the insurance company pays a visit to check the condition of the car to decide the right IDV. The factors that are looked into while deciding the IDV for a vintage car are:
- Registration:Vintage cars are required to be registered under the VCCCI.
- Value:The current value of the car is one of the key factors that decides the IDV by the company. While the surveyor will go about arriving at the value of the car, a valuation report issued by the VCCCI is also accepted.
- Age:Since each insurance company defines vintage cars differently, the guidelines for each of the car types differ.
- Maintenance costs:The level of maintenance costs decides the IDV. This can also include the cost of spare parts that may not be readily available, need to be imported, or made to order too.
Not all insurance companies offer insurance plans for vintage cars and those that do may or may not have the insurance details online. This is so because the coverage and cost differs between cars. Getting a vintage car is as important as getting a newly manufactured car insured. While third-party insurance is mandatory, car owners can choose to get coverage for own damages on a temporary basis from select insurers. Car enthusiasts who take their vintage cars out only for rallies or exhibitions can benefit from such options. The premium in such cases will be decided on a pro-rata basis.