Rising US Auto Insurance Rates Are Disproportionately Hurting Classic Car Owners

What made auto insurance see the biggest price jump in the CPI?  Blame the lingering effects of COVID and the increase in reckless behavior seen on US roads. There were more frequent, faster-than-normal speeding drivers and drunk driving surged, leading to a spike in crash severity, all of which led to more catastrophic vehicle and injury claims on auto insurers. Moreover, the pandemic created materials, parts, and labor shortages, causing repair costs for customer claims to climb like never before. Both factors combined have caused auto insurance rates to soar with little relief in sight.

Good Drivers and Auto Collectors Are Being Overcharged
In addition to the severe insurance rate increases impacting law-abiding daily drivers, collectors of classic, antique, and custom cars are among the most severely affected by these insurance cost increases. Meanwhile, agents and brokers who service this community are struggling to keep their clients' rates under control.

These collectors face a double inequity: not only are they statistically less likely to get into an accident or file a claim, but standard auto insurers often don't offer proportionally lower rates for owners who typically drive their vintage vehicles fewer than 5,000 miles annually - compared to the average 12,000+ miles driven in other vehicles.

In effect, auto collectors and good drivers have been quietly subsidizing the catastrophic losses felt by insurance companies.

For Classic Car Owners, It May Pay to "UNbundle and Save"
Drivers have been persuaded that bundling multiple insurance products like auto and home can reduce rates, but these bundling practices often cause coverage gaps for owners of collector vehicles.

"Of the 40 million+ collector vehicles in the United States, the majority are insured by standard auto insurance generalists. This could be a costly decision as the typical standard insurance program does not include coverages built for the specific needs of these vehicles or their owners," said Richard Hutchinson, Chief Executive Officer of Dallas-based OpenRoad Insurance. "Our message to auto collectors and agents or brokers serving this community: consider unbundling and saving on more appropriate and comprehensive coverage."

Collectors Still Paying More for Less Coverage
Not only are auto collectors likely paying more than they should given their reduced risk profile, the coverage they do buy could prove to be radically insufficient. This unfortunate truth will only be discovered when they actually need to make a claim.

Even for minor repairs, standard auto insurance programs do not guarantee that they will cover original parts or that their approved body shop network has the expertise necessary to repair these types of vehicles. These coverage gaps and claims handling practices can put the authenticity and value of their vehicle at risk. 

"Many collector vehicle owners don't realize that their standard auto coverage is based on a depreciated market value," said Justin Moreno, OpenRoad's Chief Marketing & Communications Officer. "That may work well for daily drivers but not for a classic car or truck. These vehicles require coverage that considers their true replacement cost, assigning a market value that takes into account their condition as well as the owner's investments. We provide that as well as expert claims handling and many other protections that are better suited to the needs of the collector car community."

Market Need Led Entrepreneurs Down an "OpenRoad"
Launching just this past summer, OpenRoad's program was built by a seasoned team of collector car and insurance industry experts. Realizing the market was ripe for more choice, the team set out to build a program that addressed the gaps currently facing collector vehicle owners as well as insurance agents and brokers servicing this community. Their insurance program not only includes specialized coverages tailored to the unique needs of classic and modern collector vehicle owners, but their pricing models also account for the reduced accident frequency often associated with collector vehicles, resulting in lower insurance rates for their owners.

OpenRoad has been rolling out its auto insurance program across the U.S., quickly growing coverage availability to 16 states with plans to operate in 30 by the summer of 2025. The brand has also seen significant interest among insurance agencies and brokerages, registering over 1,000 new partners in the past few months who are keen to have another option for their clients.

About OpenRoad Insurance:
OpenRoad Insurance launched in 2024 to provide superior coverage and lower insurance costs for classic and collector vehicle owners. They are distinguished by an agreed-value policy that insures vehicles based on their market worth, considering factors such as rarity, condition, and historical significance. In the event of a claim, they offer coverage for OEM parts and also allow customers to choose their preferred repair shop. OpenRoad offers reimbursement for roadside emergency support services at no additional cost. They also offer reimbursement for the costs associated with relocating and temporarily storing customer vehicles out of harm's way in the event of natural disasters such as hurricanes and wildfires.

Please visit OpenRoadAutoInsurance.com for more information.

SOURCE Open Road Insurance