Classic and modified car insurance: how it works

What classic and modified car insurance is and who needs it

Classic car insurance is comprehensive cover written for older, collectable or rarely driven vehicles. Modified car insurance is cover that accepts changes from the factory specification, such as engine, suspension, wheel or body work. Both exist because standard policies are priced for ordinary daily cars.

Compulsory third party (CTP) insurance is required to register any car. It covers injuries to people only. Cover for the car itself and for damage to other people's property is optional.

Registration rules affect the insurance:

  • NSW: vehicles on conditional registration under the historic and classic vehicle schemes can have a log book allowing up to 60 days of general use a year, outside club events. The owner must belong to a recognised club.
  • Victoria: the club permit scheme allows limited use of 45 or 90 days a year, recorded in a logbook.
  • Modified vehicles in NSW: a significantly modified vehicle must be assessed by a licensed certifier before registration. The NSW Government warns that insurance could be void if modifications are not certified, and says owners should tell their insurer about them.

Other states run their own concessional schemes and modification rules.

What is usually covered, and common exclusions

Features often found in specialist policies:

  • agreed value, set with the insurer at the start of the policy
  • choice of repairer, which matters for restoration work
  • the option to keep the wreck after a total loss
  • lower premiums for limited use or club registration
  • cover for listed modifications and accessories
  • laid-up cover while a car is stored or being restored.

Moneysmart explains that with agreed value you know what you will be paid if the car is written off, and that insurers may reduce the agreed value at renewal. Check the figure every year.

Common exclusions and conditions:

  • racing, track days, timed events and driver training, unless added
  • modifications that were not disclosed
  • modifications that are illegal or not certified where certification is required
  • use beyond the limits of a club or historic registration
  • drivers under a set age, or drivers not named
  • rust, wear, mechanical failure and deterioration in storage
  • business or daily commuting use on a limited-use policy.

How it is sold, and when a broker is the usual route

  • Mainstream direct insurers: many will insure older or lightly modified cars. They may decline heavy modifications or offer market value only.
  • Specialist insurers and underwriting agencies: these focus on enthusiast vehicles. Most sell direct to the public, and some also work with brokers.
  • Brokers: a broker can approach specialist markets on your behalf.

Most single classic or modified cars are insured directly with a specialist. A broker is the more usual route for a collection, a very high-value or rare vehicle, a heavily modified or imported car that specialists have declined, or a car used for motorsport. Check a broker or agency on the ASIC professional registers.

What makes this cover hard or expensive to get

  • Engine and forced induction changes that raise power well above standard.
  • Young or inexperienced drivers.
  • Imports and rare models with scarce parts.
  • No evidence of value, such as a valuation, photos and receipts.
  • Street parking or unsecured storage.
  • Past claims or driving offences.

When you apply you must take reasonable care not to make a misrepresentation. List every modification, even cosmetic ones, and tell the insurer when you add more.

Questions to ask before buying

  • Is the policy agreed value, and what evidence of value is needed?
  • Will the agreed value be reviewed at renewal?
  • Are all my modifications listed on the policy schedule?
  • Is there a limit on kilometres or days of use?
  • Does cover match the conditions of my club or historic registration?
  • Can I choose the repairer and keep the wreck?
  • Who can drive the car?
  • Are club events, shows and track days covered?

Where to complain

Complain to the insurer first, in writing, and ask for its internal complaints process. Insurers generally have 30 calendar days to respond. If a broker arranged the cover, complain to the broker about their service.

If you are not satisfied, take the complaint to the Australian Financial Complaints Authority (AFCA). It is free. Call 1800 931 678. CTP disputes are handled by the state or territory CTP scheme, not AFCA.

Find a licensed broker

Browse businesses licensed to arrange general insurance in your city, or search every state.

Sources

Last checked: 2026-10-06

Scroll to Top