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07 Jul 2021
Adam Bate James Hester

Kit car insurance - what you need to know

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Self-built kit car driving down the road

Those with a passion for motoring may find their niche in the quirky but highly fun and satisfying world of kit cars.

There’s a kit car to indulge virtually every taste and budget. You’ll probably need a garage and some spare time if you’re going to put a car together yourself, though.

When it comes to insurance, standard policies probably won’t do for kit cars, so you might find your better suited with the offerings of specialist insurers.

There should be an insurance policy that will suit your needs.

Whether that’s a kit for a replica Ferrari, vintage Porsche, the ever-popular Caterham Seven or a high-performance kit car from Ultima Sports.

 

What is kit car insurance?

Standard car insurance won’t usually cover vehicles you’ve assembled yourself, so some insurers have come up with more bespoke policies to cover kit cars.

Just as you’d expect with a conventional car insurance policy, kit car insurance could cover you for theft, fire and damage resulting from a road accident.

Some kit car insurance policies might also include a range of additional features as standard:

 

Cherished salvage

Even if your car is written off as a total loss, this cover means you could get the vehicle/salvage as well as the insurance pay-out. You then have the option to restore the car or use the parts for another project.

Dismantled parts

This covers the value of all parts when they’re sitting in your garage.

Rally cover

If this feature is included, it’s typically valid for club rallies. Rally cover might not include racing events, so you might still have to buy additional cover if you’re going to participate in races.

Personal accident cover

This compensates you or your family up to a set amount for injuries or death resulting from a car accident.

Agreed value

Kit car enthusiasts tend to prefer insuring their vehicle based on an agreed value rather than a market value.

The true value of a kit car includes:

  • All the time and effort you’ve put in to build it

  • The value of the kit

  • Any modifications you’ve made to the car.

So, it’s a bit trickier than valuing a conventional vehicle where you can quickly estimate the value online.

Agreed value means you and the insurer must agree on the value before the policy begins.

The insurer might require an independent expert to value the car beforehand.

Limited mileage

Many owners might use a kit car once a week or less for recreational purposes as it won’t be their main vehicle.

This feature might appeal to kit car owners because it could greatly reduce your insurance costs if you’re not doing a lot of mileage.

Multiple vehicles

Some insurers might allow you to combine the car insurance of all your vehicles under one policy, potentially saving you money.

This could mean combining the insurance of your conventional car with the kit car cover.

Breakdown and recovery

Some policies include breakdown cover and recovery for the UK and EU.

EU cover

Cover for driving in the EU could be included, typically for 90 days. Insurers could allow you to extend it for 180 days if you pay more.

It's worth checking the small print to fully understand the level of cover offered overseas as this may differ from when you’re in the UK.

 

Before you’re roadworthy

Kit car insurance is just what you need when your vehicle is roadworthy.

But with a kit car there’s quite some way to go before you reach that point. You could also take out transit insurance to cover the kit car, parts and tools for loss or damage during collection from the kit car maker.

There’s also build-up insurance to cover you for fire, theft, and damage over the period the car is being assembled.

How long the kit car is sitting in your garage in the assembly phase can vary a lot. This will partly depend on how much time you can dedicate to the project.

Say a car takes 300 hours to construct, and you’re allocating a few hours here and there to the job.

The car could easily be in the assembly phase for two years!

You can also get laid-up cover for when your car is off the road for restoration or if you’ve just decided to take a break.

 

Getting on the road

Once you’ve got the car assembled - hopefully without too much blood, sweat and tears – there’s some officialdom to navigate before you take to the roads.

Your kit car will need to pass the Individual Vehicle Approval (IVA) test conducted by the DVLA.

Provided your car passes the IVA, you then need to fill out a vehicle inspection report and register your car for a number plate.

 

How much does kit car insurance cost?

The cost of kit car insurance could vary a lot.

On the one hand, there’s a wide range in the value of kits on offer.

A Robin Hood Project 2B kit costs just £5,000 while a high-performance Ultima RS kit can cost over £80,000.

Agreed values for a fully assembled, road worthy kit car tend to be higher than for the unassembled kit itself.

As always with car insurance, the more expensive the vehicle, the higher your costs could be.

In terms of the car itself, the insurer will need to know:

  • The body type

  • The make and model of the car

  • The engine specifications.

Generally, the more powerful the engine, then the more expensive the car might be to insure.

Again, the variation can be huge. Kit cars have been built with a maximum speed of just 50 mph.

Then at the top end of the scale, the Ultima GTR has set world speed records for production road cars. It’s managed 0-60 in 2.6 seconds and with a top speed of 241 mph.

Insurers will also need to know about you and how you plan to use the car.

As with any car insurance policy, the premium might partly depend on your individual circumstances, including your age, where you live and your claims history.

If you’re doing a relatively low annual mileage in the car, this could reduce your premiums provided the insurer offers a limited mileage discount.

You might need specific cover if you’re going to taking the car to rallies. Some kit car insurance policies might include this as a standard feature.

If you’re planning to participate in actual races, it may work out cheaper to get bolt-on insurance for racing as and when you need it.

Remember to tell your insurer about any modifications you’ve made to the car, as this could impact your costs.

You should keep all the paperwork, including any photos or receipts that might be relevant. Failing to tell the insurer about modifications could invalidate your policy.

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So, is kit car insurance cheap?

The huge variation in kit cars means they could either be more expensive or cheaper than a standard vehicle to insure.

Kit cars’ uniqueness means they don’t normally slot into one of the 50 insurance groups used by insurers to price cover for conventional cars.

Along with the car itself, the insurance cost also hinges on how you will use it and your personal circumstances.

It’s well worth considering joining a kit car club, as this could typically give you a discount on your kit car insurance.

 

Who insures kit cars?

Kit car insurance tends to be the preserve of specialist insurers, but there’s a wide variety of cover options on offer.

It’s worth shopping around and spending some time thinking about what suits your needs most.

Lancaster Insurance, which is perhaps best known for its classic car and 4x4 insurance, has been providing kit car insurance for over 25 years.

It covers a range of kit car models, including:

  • Caterham

  • Westfield

  • Dutton

  • Marlin

  • Fisher

  • Tiger

  • GTM

  • Robin Hood.

 

Along with standard cover, Lancaster’s kit car insurance policies could include benefits such as:

  • Owner’s club discounts

  • Track day/rally cover

  • Limited mileage discounts

  • Accidental damage cover

  • Breakdown recovery

  • Laid-up cover

  • Free EU cover for 90 days.

RH, another classic car insurer claims to take a bespoke approach to kit car insurance.

They offer cover for virtually any model, covering you through the build process to completion and once the car is on the road.

RH offers enhancements such as:

  • Rally cover

  • Dismantled parts cover

  • Cherished salvage cover

  • Free agreed value as standard with its kit car policies.

This is along with mainstream features such as European cover, accident and breakdown recovery, windscreen cover and personal accident insurance.

Heritage’s kit car insurance includes:

  • Free agreed value

  • 90 days European driving cover

  • Spare parts cover

  • Club membership discounts

  • Salvage retention

  • Limited mileage discounts

  • Cover for shows, rallies, and events.

You can also opt for parts-only cover. Another option would be to put your kit car insurance under the umbrella of a Heritage multi-vehicle insurance policy along with your conventional car.

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