Collector Cars Deserve Specialty Coverage

If you know any car collectors, then you know they give their cars special attention. They store their cars under protective coverings, keep them in garages and drive them on special occasions. So if a storm, intruder or accident causes any damage to their cars, they want to know that they are insured all the way down to the scratch.

That’s why collector vehicles should be insured under a specialty insurance policy. Specialists don’t just endorse a collector car on a standard auto policy. They offer the collector a tailored plan — a plan delivered from someone who knows the collector’s lifestyle and speaks their language.

And a specialty insurance policy can provide considerable savings for the collector car owner, as well. These savings begin with an “agreed value policy.”

Agreed Value Protection

An agreed value policy means that a collector car is insured for a specific dollar amount agreed upon by the car owner and carrier. The value is based on the car’s number of original parts and the quality workmanship of modified parts. The owner is guaranteed to receive the agreed amount, regardless of market fluctuations.

The agreed value policy is superior to a “stated value policy,” which often is used by standard auto carriers — but puts the insured at the mercy of market fluctuations.

For instance, under a stated value policy a collector car may be insured at the cash value of $20,000.

But, if the market value of the car drops, the car owner may only recoup $15,000 if the car is totaled in an accident.

To determine what the agreed value can be, the insurance agent will need to identify whether it’s a “professionally restored original” car, an “un-restored original” or a “driver” car.

A professionally restored original has been restored to its original specifications yet still has the original engine and drive train.

An un-restored original is a completely original car that has everything down to the original paint and interior.

A driver car, the most common collector car, is still collectible but not worth as much because of changes made to the engine, interior and paint.

In addition, extremely modified collector cars with a custom paint job can warrant a higher value, but these types of cars are few and far between.

Your specialty insurer can help you ask the right questions to determine whether or not modifications warrant an increase in value.

Specialty Guidelines

Insurance agents will want to ask questions to make sure the collector car owner is staying within the guidelines of the specialty underwriting rules.

For example, insurance agents should ask how many miles the collector drives each year, whether the car is kept in a garage throughout the year when not in use, and whether the collector drives to and from work with the vehicle?

Be advised: Collector car owners actually need to purchase a special endorsement to drive to and from work.

Tailored Coverage

Selecting a specialty insurer for collector vehicle clients can have other advantages as well. Some specialty insurers have claims people who speak the collector car language. The insured will know when he or she is talking to a fellow “car guy,” and when trying to resolve a claim, building a rapport can make all the difference.

Usually the coverages provided by the policy are tailored to the collector car owner and his lifestyle. For instance, if the car breaks down, collector car owners are likely to want a flatbed tow to protect the vehicle against further damage. Many specialty policies will cover the additional cost.

The “car guy” also can answer questions about what repair shops they have worked with and which are qualified to work on certain cars. As most collector car owners learn, the key to a good repair is to match a vehicle with a shop that has specific expertise with the make and model of the vehicle.

Specialty insurers understand the collector’s car loyalty and passion — and they can tailor a policy that ensures the collector’s possessions are well-protected.

Topics Auto Excess Surplus