Kit car insurance

Finding the right insurance for a kit car can be a challenge, so make sure you have the facts to secure the appropriate policy.

Kit cars: a true labour of love. Personally constructed with dedication and attention to detail, many enthusiasts spend years building their dream machine to the exact specification they want.

Some are built with a love of classic car nostalgia in mind, others with a passion for performance...

Whatever the motivation, these distinctive vehicles are likely to require equally unique car insurance cover.

Luckily there are many specialist providers who not only understand kit car culture and construction, but also reward the hard work that goes into them.

Kit car insurance during construction

One of the more unusual aspects of kit car insurance is the fact the vehicle needs coverage before it's even built, relevant policies being known as build-up insurance.

Also, it may be a sensible idea to insure parts while they are in transit to you - for this you need transit cover.

Build-up cover

Kit car parts can be highly valuable in deconstructed form and may require appropriate coverage for fire, theft and accidental damage.

All kit car specialists should be able to offer this. Policies are annual and, as a rule of thumb, could cost 1-2% of the vehicle's value.

Goods in transit

Goods in transit policies are most commonly offered as a bolt-on extra to build-up cover. They usually work on a day rate to cover the time it takes for your kit car to be delivered, or for you to collect it.

Prices for such a bolt-on to a policy differ among providers, but at the time of writing (November 2013) a very rough rule of thumb could see you paying around £30 a day for the additional cover offered.

One final aspect of coverage that's important to bear in mind while constructing your kit car is your home insurance. Kit car construction will require an extensive, expensive tool kit. List your items and contact your home contents provider directly to ensure you have adequate cover.

Achieving roadworthy status

Before registering for the road, it's a legal requirement that all kit cars are examined by the Vehicle and Operator Services Agency (VOSA) and pass an Individual Vehicle Approval (IVA).

Test centres can be found in many major UK towns and cities.^† After a successful test you'll need to complete a V627/1 form.^†

The final piece in the registration puzzle is a V55/4 form^† to register the vehicle for a number plate.

During these stages you may be asked to show evidence of your build process and list specific parts of the car. It's important to document the build of your kit car with a list of all parts, plus photographs of key build stages.

You'll also need to consider insurance coverage during transit to the test centre. The same goods in transit bolt-on policy that can be applied to delivery of your deconstructed kit car could be suitable for this.

Kit car insurance on the road

After building, approving and registering your fledgling motor, you should finally be ready to hit the road… So what do you need to get it insured?

When searching for your insurance, we'd encourage you to try our quick and easy car insurance comparison service, but the level of detail required is why many niche insurance providers are unable to provide a quote online.

Each policy is unique and may well require personal communication with a specialist insurer or broker.

You'll need all the usual motor insurance information, such as the value, how you'll use the vehicle, your age, postcode, occupation, the number of drivers, where the vehicle is kept overnight, and whether it has any security devices fitted. In addition, you'll need to supply the following details:

• What type of engine you've installed
• What type of body the vehicle has

Body type and engine are the key rating factors for kit car cover underwriters.

As kit builds are unique, the usual scrutiny on modifications is no longer appropriate.

Instead, you'll be asked more details about the engine itself - for example, whether it uses a super-tuned motorcycle engine or not.

In some cases the documentation of your build - such as photos and receipts for specific parts - may be required for verification.

Agreeing the value

Because they are so unique there is no 'book value' on kit cars. Specialist kit car cover insurance providers study the market closely - some have their own valuation department, while others will use an independent, third-party evaluator.

As some kit cars can retain their value much more effectively than regular showroom models, many policies will be based on an agreed value if the unfortunate event of a total loss claim occurs.

Salvage retention rights

When comparing policies and approaching providers, always enquire about salvage retention rights. In the event of a total loss claim, certain expensive parts may have escaped damage and could be used again.

In some policies this sort of cover is included in the terms and conditions. In other cases it could be available as a bolt-on to a policy for additional cost.

Leisure driving

Kit cars are often used for hobby driving, either on tracks or off-road, and the activity may have an impact on your insurance.

Track days

If you intend using your kit car at track days, ensure you inform your insurance provider. Many companies will offer daily bolt-on policies to cover this activity for the specific time you're on the track. If you're a racing enthusiast who uses tracks regularly then this may be factored into your annual premium at a cost.

Green-laning

Off-road activity isn't considered by insurers to be as high risk an activity as track or rally days because the statistical likelihood of a collision with another vehicle is a lot lower.

Some policies include green-laning as standard while others will require additional information. To ensure you're properly covered, always inform your provider if you're considering this particular type of activity with your kit car.

Tips to keep your kit car premium low

Build the car yourself

Many kit car companies can build the vehicle for you at a cost. But, as you've not put the elbow grease in yourself, some underwriters could consider you a higher risk.

Join a kit car club

Club member enthusiasts are considered as less likely to be dangerous drivers. Cherishing their build like a family member, their dedication is recognised by certain providers.

Mileage

While there can be qualifications with regard to very low-mileage motorists, it's generally considered that the less time you spend on the road, the less of an insurance risk you are.

Many kit cars are only ever driven infrequently, perhaps as a weekend hobby, and there are policies that offer discounts for low-mileage users.

Each provider will have its own rating value on mileage so be sure to inform them when organising your policy.

It goes without saying that you should be as honest and accurate as possible when supplying such information to your insurer - under-estimating your mileage could invalidate your policy.

Security

Thatcham-approved immobilisers, trackers and alarm systems tend to be recognised and rewarded by insurance providers and could result in lower premiums.

You can read more about car security and insurance here, but remember that all providers will put different weightings on different factors when calculating your policy price.

By Dave Jenkins