How to insure a classic car properly (and stop overpaying)

Insuring a classic car isn’t like insuring your daily driver. Use a standard insurance policy and you risk being significantly underinsured, or you could be paying far more than you need to. The world of specialist classic car insurance can seem complex, but understanding a few key concepts will ensure your pride and joy is properly protected and that you’re not throwing money away. This guide will walk you through the essentials of specialist classic car insurance in the UK, from agreed values to the common pitfalls that can cost you dearly.

First, let’s talk about the single most important feature of any classic car policy: agreed value. Unlike a modern car that depreciates, a classic car’s value can fluctuate, and often increase. A standard policy will only pay out the ‘market value’ at the time of a claim, which is an insurer’s assessment of what your car was worth just before it was damaged or stolen. This can be a disaster for a classic owner. An agreed value policy, however, is exactly what it sounds like. You and the insurer agree on the car’s value when you take out the policy, and that is the exact amount you will be paid if the worst happens, less any policy excess. This protects your investment and provides complete peace of mind.

Getting the value right

To secure an agreed value, you will need to provide evidence of your car’s worth. This usually involves submitting detailed photographs of the car, along with any receipts for restoration work or parts. For rarer or more valuable cars, a formal valuation from a recognised owners’ club or an independent specialist may be required. While this might seem like a hassle, it’s a vital step. According to data from American classic car experts Hagerty, the value of some classics has risen dramatically. For example, a 1990s Toyota Supra Turbo has seen its value increase by over 40 percent in the last five years alone. Without an agreed value, you would miss out on that appreciation entirely.

Another key way to save money is through a limited mileage policy. Most classic cars are not used for the daily commute; they are cherished vehicles for sunny weekends and special trips. Insurers recognise this and offer significant discounts if you agree to drive fewer miles per year. Typical mileage bands are 1,000, 3,000, 5,000, or sometimes up to 7,500 miles. Be honest and realistic with your estimate. While it’s tempting to opt for the lowest mileage to get the cheapest premium, if you exceed the limit you could invalidate your insurance. Most insurers will allow you to increase your mileage mid term if you find you’re using the car more than you expected.

Bundling up for savings

If you own more than one classic, a multi car policy is a fantastic way to simplify your life and save money. Instead of juggling multiple policies with different renewal dates and different insurers, a multi car policy bundles them all together. This means one renewal date, one point of contact, and often a significant discount. Some specialist insurers will even allow you to include your modern daily driver on the same policy, offering even greater convenience. Hagerty UK, for example, allows you to insure up to six vehicles on one policy online, and even more if you speak to them directly.

Now for the common mistakes that can cost you a fortune. The most serious is failing to declare modifications. In the eyes of an insurer, a modification is any change from the car’s original factory specification. This could be anything from a different carburettor or a new exhaust to a full engine swap. If you fail to tell your insurer about modifications, they have the right to void your policy and refuse any claim. The Consumer Insurance Act of 2012 actually puts the onus on the insurer to ask the right questions, but the simple rule is: if in doubt, declare it. It might increase your premium slightly, but that’s far better than having no cover at all.

Where you keep it matters

Finally, consider where you store your car. Insurers will ask about overnight storage, and a car kept in a locked garage is considered a much lower risk than one parked on the street. This is reflected in your premium. According to a 2025 report from Heritage Car Insurance, your postcode and where the car is stored are significant factors in the price you pay. If you have access to a garage, using it for your classic is a simple way to reduce your premium. For cars that are laid up for winter or undergoing long term restoration, you can also get ‘laid up’ or SORN insurance, which provides fire and theft cover at a reduced price while the car is off the road.

In summary, getting the right insurance for your classic car is about more than just finding the cheapest price. It’s about finding the right protection. Always insist on an agreed value policy, be realistic about your mileage, and explore the savings offered by multi car policies and car club memberships. Declare all modifications, store your car securely, and you can enjoy your classic with the confidence that you are properly and cost effectively insured.

The Cost of Classic Cover: What the Data Says

While many assume insuring a classic is an expensive business, the data tells a different story. A 2025 report by Heritage Car Insurance found the average annual premium for a classic car is just £123. Of course, this figure is influenced by many factors. The same report revealed that Jaguar owners pay an average of £186, reflecting the higher value of their cars (averaging £36,000), while Triumph owners pay an average of just £86 for their vehicles, which have an average value of £14,000.

Your age and where you live also play a significant role. Younger drivers (those born in the 1990s) can expect to pay more, with average premiums around £215, while more experienced drivers (born in the 1950s) enjoy the lowest rates. Unsurprisingly, living in a city like London will also increase your premium compared to a rural location. The key takeaway is that specialist classic insurance is often far more affordable than standard car insurance, but it pays to shop around and use a specialist broker who understands the market.

The Power of the Club

Joining a recognised car club is one of the easiest ways to get a discount on your premium. Insurers see club members as dedicated enthusiasts who are more likely to maintain their cars to a high standard. This translates to a lower risk, and the savings are passed on to you. Discounts of up to 15% are common, with some insurers offering even more. With many club memberships costing less than £50 a year, the insurance saving alone can often cover the cost of joining, and you get all the other benefits of club life thrown in.

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