The Impact of Rising US Auto Insurance Rates on Classic Car Enthusiasts and Collectors

In recent years, US auto insurance rates have experienced an unprecedented surge, marking one of the most significant increases in nearly half a century. Driven primarily by the aftereffects of the COVID-19 pandemic, rising repair costs, and a spike in reckless driving, standard auto insurance policies are affecting not only everyday drivers but also impacting a niche community: classic car owners.

A Closer Look at the Price Hike

According to insights from OpenRoad Insurance, the Consumer Price Index (CPI) indicates that auto insurance premiums have skyrocketed by 51% over the past three years — a rate six times faster than general inflation. This surge cannot simply be attributed to inflation; it reflects deeper issues within the insurance landscape stemming from more severe accident rates and damage costs. Increased reckless behaviors, such as speeding and drunk driving, have led to a rise in crash severity, putting immense pressure on insurers.

Further complicating matters, the pandemic prompted shortages in materials and labor, driving repair costs even higher. Combining these elements, auto insurance companies have resorted to hiking premiums to cover the catastrophic losses from which they have been recovering.

The Burden on Classic Car Owners

Ironically, it's the classic and collector car owners who find themselves in a particularly tough spot amidst these rate hikes. Traditionally, owners of classic cars drive significantly fewer miles—often under 5,000 annually—compared to the typical 12,000 miles driven by the average vehicle owner. As such, classic car enthusiasts are statistically less likely to file claims. However, this reduced risk has not translated into proportional insurance rate reductions from mainstream insurers.

Instead, these collectors end up subsidizing the losses faced by standard auto insurers, further complicating the financial landscape for them. The pricing systems within the industry often overlook the specific insurance needs of classic vehicles, resulting in higher premiums for insufficient coverage.