Protecting Collectible Cars

Baby boomers are fueling a growing interest in classic car collecting, with membership in the country’s largest antique car club now reaching 60,000.

But while most car collectors know there’s a big difference between the vehicles they collect and the ones they drive every day, not everyone insures his or her collectible and everyday vehicles differently. Experts say that could leave collectors in a financial bind should they need to file a claim.

So how can you be certain your collectible car is insured properly? Here’s a closer look:

Think Actual Market Value

Like any other commodity, collectible vehicles—which include antiques, classics, street rods, modifieds and exotics—change in value on a frequent basis and their insurance should reflect that. For instance, a 1967 Shelby Mustang, which just a few years ago could be bought for as low as $35,000, is fetching around $200,000 at large auctions today.

Daily-use vehicles are insured on an ACV (actual cash value) basis, which means if you have a total loss, you’ll be paid the original purchase price of your car less all depreciation to the date of loss. But collectible cars should be insured based on something known as an agreed value basis.

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Car insurance costs up 5.8%

The average car insurance premium is now £514.36, according to Sainsbury's car insurance index, the first time it has exceeded £500 since the measure was launched in 2005.

Joanne Mallon, Sainsbury’s car insurance manager, said: "There are a number of factors leading to higher premiums, including a rise in the cost of personal injury claims and also repairs."

The index reports significant differences in premium increases based on age in the last 12 months.

Motorists aged over 65 saw an average rise of ten per cent, the highest of any age group, while motorists aged under 25 who typically pay the most saw their premiums rise by just by 2.47 per cent since July 2007. This was the lowest of any age group.

Men continue to pay more for their car insurance than women on average - £540.49 compared with £470.47.

Ms Mallon added: "Given that car insurance premiums are rising and the cost of driving is now at its highest for a number of years, it is all the more important for motorists to shop around for competitive insurance."

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Cars have 283 bacteria per cm

A study by Aston University shows drivers with pets and children are more likely to have high levels of bacteria riding along with them.

The most populated place with 356 germs identified per cm2 was the gear stick.

In one case a car had over 850 bacteria present per cm2, while bacterial traces of excrement were found in the boot of the car, in the same spot as weekly food shopping was regularly placed.

Dr Anthony Hilton, Aston University director of biology & biomedical science, said: "Whilst most of the bacteria we've found are unlikely to cause serious health problems, some cars, particularly those which regularly carry children and animals, play host to potentially harmful germs.

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Car insurance premiums will rise, warns insurer

The company, which owns insurance brands Diamond, Elephant and Confused.com, predicted premiums will rise a few percentage points over the next few months.

Admiral reported a 16 per cent rise in profit before tax to £100.3 million for the first half of 2008, while turnover rose 13 per cent to £472.5 million.

David Stevens, chief operating officer, said: "Rises in market premiums and a relatively benign claims experience over the last 18 months mean that, for the first time in seven years, we see a real prospect of falling underlying loss ratios in our core UK business."

The motor insurance industry is highly competitive and premiums have remained virtually flat over the last few years, despite a rise in the cost of claims.

But insurers have been saying that this is unsustainable, and are starting to raise their premiums.