You’ve just purchased the car of your dreams. Pop quiz: What is both the last thing you want to deal with but also the most important? That’s right, insurance – more specifically, specialty insurance for your collector car.
What exactly is specialty insurance? Without the boring textbook definition, simply think of it as a type of insurance coverage specifically designed to provide the best protection for your property – in this case, your vehicle. It takes into account how your Collector Car is typically used, what matters to you as the policy holder and, most importantly, offers the true value of your car in case of a loss.
There are two basic types of insurance companies out there: general insurers, who provide a suite of products in an attempt to appeal to the masses, and specialty insurers, who focus on a specific niche and focus all their efforts into a specific area of expertise. Companies such as Hagerty (www.hagerty.com) specialize in collector car insurance and have built their entire business and knowledge around that.
Your next question is likely, “How do you determine if a vehicle is a collector car?” Simply stated, think of a collector car as the fun car you don’t have to have. In order for a vehicle to qualify for a collector car policy, there must be one regular-use vehicle for every driver in the household – each covered on a standard auto policy. The premiums for collector car insurance policies are priced based on the premise that these collector vehicles are not used for necessary everyday transportation.
The beauty for the consumer is there are several options out there, so you can easily compare prices and services. Hagerty is the largest specialty insurance provider for collector cars in the world and offers the following advice when seeking out the best coverage for your collector vehicle(s) in your garage:
How will the insurance company assess the value of your car?
This is one of the most – if not the most – important questions to ask. Will the policy be written as an Actual Cash Value (ACV), Stated Value (SV) or Agreed Value (AV) policy? To the casual observer, these three types of policies may seem the same, but the fundamental difference is how depreciation is factored into the value of your collector car in the event of a covered total loss. An ACV policy will simply assess what the insurance company thinks is the current market value of your car at the time of the loss and pay out only what they think the car is worth. If you experience a total loss with an ACV policy, good luck getting what you paid for your car. Most standard car policies are ACV, and this makes sense considering everyday vehicles depreciate in value as time goes on.
A Stated Value (SV) policy is designed so you can state the value of your car at the time the insurance policy is issued, and your premium is based upon that stated value. This is better than an ACV policy, as you discuss the value of your car with your insurance agent ahead of time. However, at the time of a loss – especially a total loss – a SV policy allows the insurance company to still depreciate from the original stated value, based on a number of factors including any obvious wear and tear, miles, previous unclaimed damage, etc. It shouldn’t come as a surprise that if an insurance company can factor in any amount of depreciation they want, they’ll likely find a way to do so in order to lessen the amount they pay out on a claim.
Neither an ACV nor SV policy covers you completely. Both figure in depreciation. An Agreed Value (AV) policy, on the other hand, does not. You and your agent agree upon a value for your car at the time the policy is issued, and in the event of a total covered loss, you receive a check for the total Agreed Value. No questions. No depreciation. No squabbling.
And whether the value of your car goes up or down, you always have the ability to change the Agreed Value amount. The key is, you agreed upon the value ahead of time, so that in the event of a loss you don’t have to battle your insurance company over the amount you are owed.
Who handles the claims process?
This is also an important question. Of course, you don’t plan on anything bad ever happening to your car. But, if it does your next concern is who is taking care of your car. Remember, this article is talking about the fun car you don’t have to have—so you are most likely very concerned with who is caring for your baby versus the commuter car you drive back and forth to work every day. Virtually all large general insurance companies have claims adjusters who handle all sorts of claims from homes, to personal property, to art, to modern cars, etc and are not specially trained in one particular area of expertise. On the other end, the smallest of specialty insurance companies are not large enough to have their own in-house claims department so they end up farming out the claims process to a third party call center—equally as bad. The best case scenario is to go with a specialty insurance company that handles the entire claims process in house. This means that not only is the policy specifically designed for you, the person handling your claim only deals with collector cars that a specialized level of care versus how most modern (dare I say “disposable”) cars are repaired. This is a huge advantage for you to work with a claims adjuster who actually understands the significance of your car and also the passion you have for it.
Who can repair your car in the event of a claim?
Many insurance companies want to restrict you to their own “network” of repair facilities to do the work on your car. While one of the reasons they create such a network is so the facility is deemed a trustworthy and reputable shop you can be sure that the insurance company has also dictated the amount the shop can charge for repairs. This works for the standard insurance market who primarily deals with modern every day vehicles but not necessarily with collector cars. A specialty insurance company understands that it takes a specialized shop with certain expertise to properly and authentically repair your collector car. So, another important question to ask when choosing an insurance company is if you can choose the repair shop of your choice—even if it means you want to fix your own car. If the answer is anything other than an open ended “yes” you should look elsewhere.
What should you do if you experience an accident?
No one wants to be involved in an accident, especially in a collector car they’re passionate about. But accidents do happen, so be prepared. If an accident occurs and no one is injured, get you and your passengers to a safe place away from moving traffic, then contact the local authorities to report the accident. Whether or not the accident is your fault, it is important to file a police report.
When it is safe to do so, take photos of the accident scene, even if the only camera available is on your cell phone. Finally, after the vehicle is safely removed from the scene, contact your insurance company within 24 hours, if possible, and begin the claims process.
Other questions to ask about collector car insurance
Hagerty Insurance Agency, Inc.
Hagerty Insurance Agency, Inc. is the leading insurance agency for collector vehicles in the world and host to the largest network of collector car owners. Hagerty offers insurance for collector cars, motorcycles and motorcycle safety equipment, tractors, automotive tools and spare parts, and even “automobilia” (any historic or collectible item linked with motor vehicles). Hagerty also offers overseas shipping/touring insurance coverage, commercial coverage and club liability coverage. For more information about coverage on your collector cars, contact Hagerty’s Private Client Services department at firstname.lastname@example.org or (888) 460-6040. You can also visit www.hagerty.com for further information.
For more information about Collector Car Insurance, as well as a listing of classic automobile insurers, Hemmings Motor News provides more information here.