Having an insurance cover for your car is important. A part of the insurance, the third party liability cover, is mandatory by law, whereas the other part, the own-damage cover, is optional. Having a motor insurance could be helpful in covering the costs in case of some damage in an accident or even theft of your vehicle.
But what should you do if you own a vintage or classic car that needs special care? The quick answer is: keep it insured.
Before going into details about how they can be insured, remember that vintage and classic are two different categories of cars. According to the India Motor Tariff, any car manufactured prior to 31 December 1940 and certified by the Vintage and Classic Car Club of India can be considered a vintage car for the purpose of insurance. Similarly, any car manufactured after 31 December 1940 but before 31 December 1970 is considered as a classic car.
Is the insurance for these cars different than that for regular cars? Yes and no. As third-party liability cover is required for all registered vehicles, vintage car owners also need to take it. Just like regular cars, the premium based on engine displacement capacity, as set by the insurance regulator, is also applicable to these cars.
The difference is in own-damage insurance. For a regular car, own-damage cover is based on the insured declared value (IDV), which is calculated as the manufacturer’s listing price of the vehicle minus depreciation. This IDV is the maximum sum assured that you can get in case of complete damage to the vehicle or theft. According to the India Motor Tariff, the 5% depreciation is accounted for arriving at the IDV of vehicles that are up to six months old. This goes up to 15% for vehicles that are less than one year old. The depreciation increases up to 50% over five years. Beyond five years, the value is mutually decided between the insurer and the vehicle owner.
However, the method to arrive at a sum assured for vintage cars is different. Here, the insurance company would look at additional documentation and certification. The foremost condition for vintage cars is that these should be registered with the Vintage and Classic Car Club of India. Insurance companies Mint spoke to said in most cases, the insurance company appoints a surveyor to get a valuation report. Insurers also accept the valuation done by the Vintage and Classic Car Club of India.
Apart from valuation, the report also focuses on factors like the cost of spares and repairs for that particular model, as spares and service for these is not readily available. The premium for older models are higher as often spares for these need to be imported and are even made to order in some cases. Once the owner of the vehicle and the insurance company agree upon a value, own-damage cover is given for the value.
A senior official of a general insurance company said these policies are not listed on their website as the value is different in each case. Moreover, the official said, in most cases owners of these vehicles sign up for an own-damage cover only for shorter durations for rallies and exhibitions, which has pro-rated premium for the shorter duration. This is done under the ‘Endorsement 31’ of the India Motor Tariff that allows additional coverage for a specific event like an exhibition or a rally. This is done because the own-damage cover for these cars turns out to be costly as the spares and service is expensive.
Largely, the insurance and related benefits for vintage cars are similar to that of any regular car. Just that the process is a little more layered for vintage cars.