Is Your Classic Ride Adequately Valued?
By Rick Drewry
If your collector car is ready for the open road, one thing is for sure. You need to be shopping for collector car insurance. But before you can pick an insurance carrier you need to know how to accurately establish your collector vehicles’ value. You can’t protect your automotive investment unless you know it value. Don’t wait until its time to make an insurance claim to discover the difference between a standard auto policy and what a collector car insurance policy protects. .
As an example, on a 1969 Pontiac GTO, the paint job alone could range anywhere from $3,000 to $15,000. Does it have a glass finish? Maybe a little bit of orange peel? Is it all original? How many stages of prepping, polishing, taking off parts and putting them back on would be necessary to bring that paint job back to its original luster? Restoring classic cars is complicated, and there are a lot of factors to take into account when considering proper valuation.
One of the differences between a standard and collector car insurance policy is the difference between “agreed” and “stated value”:
- True collector car policies use agreed value to determine the value of the vehicle. The owner and the insurance carrier mutually agree on the value of the vehicle before the policy is purchased. In the event of a total loss accident, the insured would receive the predetermined value (less any deductible) for the car.
- Some insurance companies may offer stated value policies which place a cap on how much the car is worth. In the event of a total loss, the depreciated cash value of the car is calculated. The insurance company pays whichever amount – stated value or depreciated cash value—is less at the time of the loss, and that’s almost always the cash value.
Drew Yagodnik, vice president, Classic Auto Insurance, who has offered agreed value policies as a stand-alone product for over 25 years, said, “What we’ve found is that people trust their agents. The agent has been looking out for them with their standard auto insurance for years, so why not trust them with the collector car coverage as well? What they don’t realize is how inadequately a standard auto policy is going to protect their classic car investment and that there are specialty insurance companies that can offer a much higher level of protection at a comparable price.”
Recently Drew lead a team of employees of Classic Auto Insurance and American Modern Insurance companies on the restoration of a 1965 Chevy C10 Resto Mod Pickup. Click here for a link to their restoration project video.
So, before you cruise to your next classic car meet, you might want to make sure that your ride is adequately covered under its current policy. If you decide that investigating some other available options makes sense, here are some things to consider when shopping for collector car insurance:
- Collector Car Specialists
Look for insurance agents and companies that specialize in collector car coverage to insure the policy will adequately cover the value of the classic car. Specialty insurance companies closely track the collector car market value ranges to help accurately determine the guaranteed value when writing the policy. They stay focused on their core, classic car products and many may not even offer standard auto coverage.
- Inclusive Product Offering
Servicing a wide range of collector vehicles – from classic and antique cars to modified cars, street rods, muscle cars, fire engines and military cars–is another sign that an insurance company specializes in collector car policies.
- The Right Coverage at the Right Price
When and how often a collector car will be driven can vary as much as the makes and models of the cars themselves. Look for a company that will work with its customers to provide tailor-made coverage for their specific mileage needs and usage situations. One-size-fits-all policies won’t provide the flexibility that can make a difference in determining premium rates.
- Quality Claims Teams
Look for a company whose associates are collector car people themselves. Passion for the product is something that can’t be taught to a claims adjuster. If they don’t know this industry, the repair process and the differences between the quality of cars, they are just going to be guessing on valuation and repairs. That’s why a claims team that has hands-on experience in the auto repair industry make the best adjustors for collector vehicles. That pedigree of decades of experience will provide you with the peace of mind that you’ll want when driving or repairing your classic ride.
- Excellent Customer Service
A strong partnership between the insurance agent and the insurance company provides customers with a well-informed and responsive team focused on their specific vehicle. Yagodnik describes it this way, “When you’ve worked with a carrier for a long time, that combined experience allows you to get to the right answers quickly for your clients. We watch trends in restoration and repair so we know what to look for. Having worked together with a specialty carrier partner on hundreds of policies is a huge plus for our customers and ensures them of a high level of knowledge and service.”
- Collector Car Specialists
Working with specialty collector car insurance companies and agents will provide you with an accurate and guaranteed valuation of your investment and allows you to establish the specific and appropriate level of protection needed. When it comes to collector car restoration and repair, nothing beats the knowledge of real classic car enthusiasts with decades of hands-on, repair shop experience and a passion for restored, classic rides.
Rick Drewry, a Senior Specialist for Collector Cars and Claims Learning at American Modern Insurance Group, Inc. in Cincinnati, Ohio, can be reached at RDrewry@AMIG.com.