Does insurance cover restoring cars?

You might not think you need it, but car insurance is important when you are restoring a car. Whether you are doing the restoration yourself or having a professional do it, insurance protects your investment.

There are many car insurance companies that can help you to get insurance for a car you’re in the process of restoring. If you are getting professional help with your restoration through one of these shops, you are likely paying to be in well-insured hands. While you may not need car insurance for a car that’s not drivable, you may still want to protect your investment. 

Read on to learn about insurance for restoring cars, how it works, and why you need it.

Does insurance cover restoring cars?

Yes. Several insurance companies specialize in classic cars and those that will even insure your restoration project. Grundy Insurance and similar companies provide insurance for those restoration shops as well as for individuals. These overseers cover in-progress work based on agreed value.

The term “agreed value” is hot in classic car insurance, and it means that a depreciation deduction will not be applied to your payout if your car is damaged. This term applies to restoration insurance, whether you are the builder or you hire someone to build your car.

Classic car garages may also have additional insurance to cover physical damage to your car through a third-party company. These insurance policies may also include personal and bodily injury liability coverage.

While paying someone to restore your car may have additional fees, the insurance benefits are notable. But others may see perks in their at-home build. In this case, you may opt to insure your project car or not. Keep reading to learn more about insurance for vehicles in your garage.

Should I buy car insurance for a vehicle I am restoring?

You’re pouring your blood, sweat, and tears into getting this car running. You don’t want to flush your investment in one accident. Even if your car isn’t moving, it could be at-risk of being damaged.

Your car could suffer water damage from a flooded garage, or your equipment could break and damage your restored parts. Insurance is a backup plan at the end of the day.

Bear in mind that how you register your car may impact the legal need for insurance. Check with your local DMV for the rules on registration of a non-operational or classic car and what insurance laws apply.

Does a car that never leaves the garage require car insurance?

Legally, it would be best if you had auto insurance on vehicles registered through the Department of Motor Vehicles. Since you don’t need to register your car until it’s mobile, you don’t technically need car insurance when you’re restoring cars.

You’re free of legal obligation if you never take your restoration project out on public roads. Remember, however, that even if you take a drive around the block, you need to meet the legal requirements for insurance.

Even if you don’t drive it, things happen, and having some coverage on a stationary vehicle could be beneficial. 

What restored cars qualify for classic insurance?

 According to the Insurance Information Institute, a car is classic when it falls under some of these factors: 

• Antique or older cars, usually at least 25 to 30 years old
• Hotrods and modified vehicles
• Exotic and luxury autos
• Muscle cars

As you can see, it’s not just American muscle cars that qualify for classic car insurance, and providers can wrap your unique mods and old-school trucks under these policies. The main thing to understand about classic car insurance is that the mileage and use of the vehicle are restricted.

Of course, each insurance company has its own rules for what type of car it will insure.

Who sells car insurance for a classic car?

A few nationwide providers have joined in partnerships with some big-name providers unique to the classic car game. Grundy Insurance, Hagerty Insurance, and J.C. Taylor are boutique-style providers that provide limited car insurance to show cars.

The agencies that offer specific coverage for the collector or classic cars are generally tailored to customers that are restoring classic cars for a show. While some benefit from daily-commuter policies, drivers will likely be limited in average annual miles. (For more information, read our “Best Car Insurance for Classic and Collector Cars“).

Here are a few:

• American Collectors – This company offers coverage with an “Agreed Value” policy. In the event of a total loss, this coverage means that the company will pay you the agreed-upon value without any depreciation deduction. 
• American Modern – This company offers coverage for a variety of collector vehicles. American Modern, too, offers agreed-value settlements. 
• Leland-West – Agreed value insurance is the highlight of this company’s coverage. It is designed to cover American or foreign classic cars, sports cars, one-of-a-kind vehicles, muscle cars, and other collectibles. 

Leland-West is one of the few companies that offer unlimited or flexible mileage programs. Drivers will often be limited to 3,000 or fewer miles with insurance on a restored muscle car. 

Again, depending on how you use your new car, you may want to opt for a standard policy. If you are building the car to drive it, you still have options. Some standard car insurance providers are a part of special programs that cover even the best car restoration.

Car insurance providers with classic car programs: 

• Geico 
• USAA 
• Allstate 
• Nationwide 

Bear in mind that there companies often provide the coverage in partnership with one of the specialty companies listed above.

More Tips About Restored Car Policies

Restored cars come with a lot of unexpected costs. The build itself is an adventure, but insuring the car is its own game.

The price of your muscle car will have a significant impact on your insurance rates if you opt for full coverage. However, there are liability policies available to classic car owners, and these policies cover bodily harm or property damage in an accident.

Another unexpected insurance expense is repairs. You’re not safe from damage once you’ve restored your muscle car. If you’re unwilling to keep up with regular maintenance or update aging pieces, you could break down on the roadside. When that happens, classic car scans cost up to three times the standard rate at the mechanic. 

In the next section, learn about the best cars and tools to use during a rebuild project.

What do I need to restore a car?

Once you have an idea of what you’re taking on, time to start gathering your tools, the restoration of a muscle car is done in three parts: engine, paint, and interior. (For more information, read our “The Complete Guide to Car Engine Parts“).

What is the best car to restore?

According to car experts and restoration professionals, many factors can make restoration harder or easier. When choosing a car to restore, research the availability of parts and the availability of the car’s body.

The following is a list of the best cars to restore based on affordability and availability of parts.

• 1963-1965 Buick Riviera
• 1967-1969 Chevrolet Camaro
• 1978-1982 Chevrolet Corvette
• 1968-1970 Dodge Charger
• 1979-1985 Fiat Spider
• 1964-1966 Ford Mustang
• 1961-1966 Ford Thunderbird

Below is standard equipment for car restoration projects.

• Auto body kits. Car restoration is mainly bodywork. A good auto body kit is essential to your success.
• Engine hoist. The easiest way to work on your engine is to have it out of the car, but it is too heavy for you to take out alone.
• Paint booth. A booth is easy to build, but painting cars is a skilled talent that takes years of practice.
• Electrical testers. There can be many problems with the electrical systems in restored cars. Electrical testers allow you to check systems and make it easier to get the car going.

Here is a list of other tools in every restorer’s garage: 

• Safety glasses
• Jack stands.
• Floor jack
• Socket sets
• Ratchets
• Socket wrench extensions
• Screwdrivers
• Engine puller Engine stand
• Transmission output shaft cover
• Pickle forks
• Spring compressor
• Transmission jack.
• Code scanners

Once you’ve got the body, you’re ready to go. While we earlier discussed keeping your car safe, restorers must also take precautions.

Overall, remember to stay safe on the road and in your garage.

Read more: Does car insurance cover transmission repair?

The Bottom Line: Restoring Cars and Insurance

More than likely, restorers want to show off their challenging work and keep it safe. You risk your entire investment when you do not insure your restoration build, so make sure you consider your risks. If you’re fixing up a rare car with foreign parts, car insurance can save you thousands of dollars if someone damages your car. 

If you’re in the beginning stages of restorations, there is a possibility of damage before the engine can even run. Someone could be injured in your garage, and you could be held liable. However, insurance can alleviate those costs. Shop around to find the right coverage.