Insurance producers, follow the money. It’s going into collector vehicles of all makes, models and years.
Here are three facts to illustrate.
1) Collectors spend money — lots of it — to buy and restore their collector vehicles. Hemmings Motor News, an authoritative publication, notes that collectors spend an average of $6,080 on restoration work per year.
2) Vehicle collectors spend 25 hours monthly on their hobby, according to an American Collectors Insurance survey of 400 insured customers.
3) Sales of collector vehicle parts have blossomed at a 7.3 percent annual growth rate for 10 years, reports the Specialty Equipment Market Association). Meanwhile, the economy was growing at an average of “only” 3.1 percent per year.
If a customer spends both time and money on collector cars, that shows the cars are very valuable to them personally. So every personal lines producer should sit up and take notice of this booming market. It’s good for business, because when an agent pleases a vehicle collector, profit, loyalty, and additional business readily follow.
More than just money
Collectors aren’t just about money, though. They’re about passion and love, too. Joanne Poset still has the 1961 Triumph sports car that her father bought her to drive to college some 40 years ago. A fellow student named Steve helped her fix it, and he later proposed to her in the car. She wrote us: “After three decades, [we] are still married and still driving [the] sports car, a TR3a, the most desirable, popular, and expensive version of Triumph sports car on the collector market today.”
This enthusiastic collector completely restored her car in 1993 and takes her “ride” to car shows on the East Coast.
Today, collectors can readily and inexpensively buy specialty insurance coverage to protect their dreams. Smart collectors and agents look for policy features like these:
•Agreed-value coverage that pays the vehicle’s full insured value with no depreciation (minus any deductible) in the event of a total loss.
•Inflation protection (many collector vehicles appreciate in value, which presents a financial risk collectors must either insure or retain).
•Spare parts coverage for hard-to-find parts.
•Automatic coverage when customers buy a new collector vehicle.
Serving this market is not just about policy features. Outstanding service and relationships are critical. Today’s customers and agents are won over by combining technology with the good old-fashioned human touch.
Online account access and web quotes are common in the collector-vehicle insurance market. Yet, we’ve found in surveys that customers don’t like technology that keeps them away from agents and service professionals. “A real person answering the phone” is a customer’s most important service requirement.
Size of the market
The collectors’ market is far larger than most probably imagine. About 7 percent of Americans own a collector vehicle, reports The Wall Street Journal. That means 18 million people need collector-vehicle insurance coverage for everything from cars and trucks, to motorcycles and military vehicles, even farm vehicles.
The quality of collector vehicles and restorations has only gotten better in 30 years, but the dedication and passion of collector-car owners has been a constant. People from all walks of life — especially business owners, professionals and executives — are enthusiasts and collectors.
Financially, the market is attractive. U.S. collectors have the income levels, assets and financial risks that make them attractive customers. Hemmings Motor News has a subscriber profile that appeals to many agents: average household income of nearly $140,000 and household net worth of more than $1 million.
Collectors love their cars, trucks and motorcycles but need professional agents to guide them. However, at least one estimate shows that fewer than 50 percent of collector-vehicle owners are insured with a specialty policy.
Here’s the opportunity for agents: Identify the car collectors in the agency’s customer and prospect database. Then explain to them how they could get better coverage at lower rates with a collector’s policy.
Dave Wiener of Wiener & Co. in Pennsylvania tells us that specialty coverage is just the beginning of a solid customer relationship. He says: “The collector-car policy gets my foot in the door. … The classic car owner present us with tremendous cross-selling opportunities since they are the kind of clients any agency would want — financially secure, responsible, with good driving records and some with their own businesses. … From the classic auto policy, we have gone on to write some clients’ regular auto, homeowners, and business policies.”
When it comes to agents working with collectors, three things have universal appeal: higher client retention; greater customer loyalty; and a turnkey sale that works.
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