Special Policies For Special Cars

How to find new and existing leads in the collector auto market

Everyone knows a car guy. Maybe he’s the neighbor who spends entire weekends in his driveway — armed with a toothbrush, cotton swabs and chamois cloths — meticulously polishing the ’69 Camaro he’s coveted since high school. Maybe he’s the uncle who’s owned his ’41 De Soto since ’41 — the one who loves to tell tales of memories made in the car. Or, maybe he’s the co-worker who just bought a hot new sports car for weekend pleasure cruises.

Collector vehicles account for roughly 2.5 percent of the total vehicle market. The majority of collector vehicle insurance business is buried in personal lines books under actual cash value or stated value coverage, but since most collector vehicles actually appreciate in value over time and aren’t driven daily, that’s not always the best option.

Specialty cars may warrant specialty insurance. In many cases, collector cars are better protected under niche-market policies offering agreed value coverage and other features suited to the unique needs of collectors.

While a niche-market policy is usually in the best interest of the insured, it can also be an advantageous tool for the agent. Selling collector car insurance can be a tremendous lead-generator. Collectors are often excellent risks with a multitude of insurance needs, including standard auto, home, business, life and health.

Collector car policies often set the stage for client loyalty. By safeguarding a client’s prized possession, an agent begins to build a trust-based relationship that can ultimately lead to increased revenue.

While the premiums generated from the actual collector car policy might not be considered significant the opportunity presented to write all the other lines of business for the client will offer financial rewards to the agency in terms of additional revenue and improved retention.

Choosing a Provider

There are a variety of specialty insurers to choose from, and many appear to offer the same basic product. However, policies can vary greatly from provider to provider and therefore it is important to use due diligence when searching for a specialty agency.

Make sure to read the policy language. Some carriers may have mileage restrictions or use limitations, so it is important to have a clear understanding of each contract. In addition, ask clients probing questions and make sure to understand how they use their car.

Agents should look for these policy features:

Agreed Value — Agreed value coverage is the best option for collector vehicles, since most increase in value over time. An agreed value policy takes into consideration purchase price, investments in repair and restoration, market value and any other circumstance that could affect worth. In most cases, an appraisal should not be required to establish the agreed value.

Flexible Usage — While all collector car policies stipulate that the insured vehicle is not used as a daily driver, some specifically exclude pleasure driving. Look for a company that offers flexible usage and beware of mileage restrictions and attendance clauses.

In-House Claims Handling — Collector cars require special handling in the event of an accident. It’s important to choose a carrier that handles claims in-house and understands why a replacement part for a rare classic might cost much more than the same replacement part for a late-model car. Also, look for a carrier that allows clients to choose their repair shops.

Other policy features to look for when searching for a specialty agency are one-time liability charges, deductible options and instant new purchase coverage.

Finding Clients

Once a carrier is selected, it’s time to find clients. It’s a much easier task than most would think — many agents have a wealth of collector car business in their current books, vehicles that would be more appropriately covered under a specialty policy. These include vintage vehicles as well as newer cars that are treated as collector vehicles and not used by daily drivers.

With many agency management systems, agents can search based on the year of the vehicles currently insured, which is a great way to begin to mine their existing book. At the annual or semi-annual client review, make it a point to ask questions about vehicles insured on their current policy. It’s important from both an errors and omissions perspective as well as a client service option. It will impress the client that not only will this save them money, but it will also provide them with better coverage. It is a win-win for everyone.

Beyond the current book of business, it’s easy to prospect for new clients by attending local car shows or by offering to be a guest speaker at a car club’s meeting.

Car guys are everywhere — as are car shows and car clubs. Set up a booth at a local show or take pizza to a club meeting to create opportunities to explain why these cars should be insured on a collector car policy.

With a little effort, agents can establish themselves with a great group of people and write new business at the same time.

Topics Auto Agencies Excess Surplus