Guide to kit car insurance

* Everything you need to know about car insurance * All types of policies explained * How to get the right policy for you...

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What Car? Staff
20 Aug 2012 10:17 | Last updated: 14 Jun 2018 00:03

Building a car from scratch is a labour of love and requires a lot of time and effort not to mention money. All of this makes it vital to ensure you have the right cover in place to protect your prized Lo-Cost Lotus Seven Replica, AC Cobra or Challenger E-Type.

As a kit car is not like any other ordinary car, with the builder having assembled all the parts and mechanics themselves, specialist insurance is required.

Cover can vary according to the make, model and desirability of the car and also according to how much you have modified the car, and the value of parts which can be sky-high.

You may find you have to pay bit more of a premium for tailor-made cover, but this may be a price worth paying to give you peace of mind.

Kit cars and the law
To drive a kit car legally on the road, it has to pass an Individual Vehicle Approval (IVA) test; this costs around 200. Tests take place at approved sites with inspectors from the Vehicle and Operator Services Agency.

Having passed its IVA, your car will not usually require an MOT for another three years.
However, it must have a valid tax disc, or if it's being kept off-road, a statutory off-road notification (SORN).

Features to look out for in a kit car insurance policy:
Build-up cover

As well as covering for all the usual risks to your vehicle, such as theft, fire and damage from a road accident, look for 'build-up cover'. This insures you kit car as soon as the parts arrive, meaning you can make a claim if parts are lost or stolen before the vehicle is fully assembled.

Features will vary from policy to policy, but some insurers will also offer protection for component parts that are damaged or lost in transit.

Agreed value
While many insurers will only pay out the 'market value' if your car is stolen or written off, a specialist kit car policy will generally pay out an 'agreed value'.

This is an important feature to look out for, as it can be difficult to put a price on a kit car, especially if it's been modified.

Similarly, as kit cars do not depreciate in the same way that ordinary cars do, and can, in some cases, increase in value, having an agreed value at the outset can ensure you won't get a nasty surprise if you need to make a claim.

Salvage retention cover
Another feature to look out for is 'salvage retention cover' as this enables you to buy back any parts that can be salvaged if the car is written off. You can then use these to build a new one.

Age limits
Find out whether motorists of all ages can drive the car, or whether the policy is restricted to those above a certain age, as many exclude those aged under the age of 21.

Adding features to a kit car policy
It is possible to add more comprehensive features to a kit car policy, but you will usually have to pay an additional premium to do so.

You may want to add breakdown cover, as this may be excluded from some kit car policies, and also legal expenses cover.

When choosing a policy, think carefully about how you use your vehicle, as if you are a track or racing enthusiast, you need to have suitable cover in place.

The same applies if you use your kit car for weddings, or other formal occasions: you need to check you are adequately insured.

Equally, those who plan on taking their kit car overseas need to scour the small print to check for limits or exclusions when driving in Europe.

How to cut the cost of kit car cover
While kit car insurance can be expensive, there are steps you can take to keep costs down.

If you don't use your car every day, speak to your insurer about agreeing a lower mileage discount, as this can help reduce costs.

Also find out if your premium falls if you agree to a higher voluntary excess; this is the amount you have to pay towards any claim.

Inform your insurer if you are a member of a vehicle owners' club, as many specialist companies offer discounted premiums, often around 15%, to those in a recognised club or enthusiasts' forum.

If you are happy repairing the car yourself if it gets damaged, consider taking out 'parts only' insurance; by paying just for parts and not for labour you may be able to save around a third.

Shop around
One of the best ways to ensure you are getting the best price for your insurance policy is by shopping around, comparing prices across the whole of the market.

This article has been researched and written by whatcar.com's car insurance partner, MoneySupermarket