Insuring A Kit Car

You've just finished building your car by hand—piece by piece. As proud as you are to show off your work, you can't drive the vehicle around town just yet. You need to insure it first, but there are implications to consider, including what types of coverage to buy and how to keep the premiums for your unique auto affordable.

Why Insurance for a Kit Car Costs More

The premiums for a kit car generally are higher than for other vehicles. In fact, you may need to purchase a special policy from an auto insurance company that insures kit cars and other custom-built vehicles.

Auto insurance will cost you more because kit cars typically have big and powerful engines with lightweight bodies to allow for high speeds and fast acceleration. This makes the vehicles attractive to car thieves. Kit cars are also unique, and your car may be one of a kind, making it even more appealing to a car thief.

Because kit cars often are built to be fast, drivers are at higher risk of being involved in an auto accident. If you are in an accident, the vehicle may cost more than a standard vehicle to repair. Each of these factors contribute to higher insurance premiums.

How to Insure a Kit Car

Consider agreed-upon-value coverage when buying an auto insurance policy for your kit car. Since your vehicle is custom built, it won't have a set value that you can look up in Kelly Blue Book or other vehicle valuation systems.

Agreed-upon value is the amount that both you and your insurer agree your vehicle is worth. The agreed-upon value is the amount you will receive for your car if it is damaged beyond repair.

Keep in mind that it may be necessary to adjust the value as your vehicle ages. Unlike traditional vehicles that lose value each year due to depreciation, kit cars may become more valuable.

How to Get Better Rates

Even though you will pay more for kit car specialty insurance, there are measures you can take to keep the insurance premiums as low as possible. As with any type of auto insurance, it's important to compare prices and coverage offered by several different insurance companies. You'll likely have to speak directly to insurance agents since you may need to describe the vehicle in detail, particularly when describing the engine and body type.

Adding anti-theft features to your kit car may qualify you for a discount on the insurance rate you pay. Safety features, such as daytime running lights, air bags, anti-lock brakes, a laminated windshield, electronic stability control, and a crumble zone at the front of the vehicle to absorb the impact of a collision can save you money on your premium as well.

Why Buy Insurance Before the Vehicle Is Road Ready

Look into build-up coverage when you're building your kit car. This type of insurance covers vehicle parts that are stolen, damaged, or vandalized while you are still working on the car. You may also be able to insure the various parts of your kit car as they are shipped to you.

Salvage retention coverage is something else to consider. This is special coverage that will allow you to retain any parts of the vehicle that you can use to build a new car if your vehicle is damaged in an accident.

For more information, contact an insurance agent at an agency such as Nelson Insurance Agency.