What is covered by a classic car insurance policy?

While a comprehensive classic car insurance policy is broadly similar to a policy for a modern vehicle, there are a few crucial differences that you need to be aware of.
First off, the valuation of a classic car is very important, as it can be quite tricky working out the “true value” of an older or vintage vehicle. The danger here is that if your policy states that it will pay out the “market value” in the event of a write-off, this payout may not reflect the true worth of the vehicle.  To get around this problem, it's advisable to agree a value with the insurer when you apply for the policy.

You can get a valuation carried out by an approved and recognised industry expert before arranging your policy. There may be a cost for this service, but this is a price worth paying to ensure that if the worst happens, you get the right payout.
In addition, you should also talk to your insurer about being able to update the agreed value of the vehicle each year, as some vintage models will increase in value as they get older. Fail to update the policy, and you will not get a payout that reflects the current value.
When setting up a policy, you should also check the replacement parts policy before handing over any cash. This is particularly important if your car is very valuable, as you will want to be sure that any replacement parts are authentic.
While it's possible to get a cheaper policy which does not guarantee to replace parts with authentic pieces, you need to work out whether it's worth paying more to have this additional cover.
With a classic car insurance policy, you also need to find out about the maximum mileage, as insurers set this based on the proviso that classic cars are driven less often than more modern vehicles. Generally speaking, this limit is around 7,500 miles a year, so make sure you check what happens if you go over this limit in any one given year; in some cases this could render the policy invalid. Ask your insurer whether there is any option to change the agreed mileage in the future.

In addition, you need to be aware that with a classic car insurance policy, you do not build up a no-claims discount. As you will pay a flat rate for your cover, it's all the more reason to spend time shopping around for the right policy at renewal time.
Further, given that many classic car owners take their vehicles to events such as shows and rallies, it's worth checking if you are covered - and whether that cover extends to shows and rallies overseas, or if you need to pay an extra premium for this.
Drivers who hire out their classic car for weddings will almost certainly have to extend their cover because most policies do not include cover for use of the car for “hire and reward.”