by Jessica Fegan
You’ve been preparing for this show all year. Your hotel reservations have been made for months and you and your buddies came out a day early to make sure you’d get to the show early to secure the best spots. You haven’t been working on her all year to park her in the back row. Waking up this morning wasn’t hard, even though falling asleep last night was. You quickly scan the hotel room to make sure you have everything you need. Polish– check. Favorite cloth– check. Keys– check. You’re all set. You grab a coffee and a Danish from the lobby and you and the boys are on your way. As you leave, everyone teases you about winning best in show, but you know it’s yours. You get out to the parking lot and everyone disperses to their rightful vehicles. You look at the spot where you’d left her the night before. It’s empty. You stop dead in your tracks and blink in disbelief, quickly convincing yourself that you must have forgotten about moving her. Panic starts to set in. Your heart is racing, palms sweating. You frantically scan the parking lot and she’s nowhere in sight. This cannot be happening.
Sadly, the nightmare described above is too often a reality in the insurance world. However, if you read on, you’ll learn how to make sure a scenario like this doesn’t turn a nightmare into a real-life horror story. It all starts with choosing the best insurance provider that will properly suit your needs.
Before beginning your hunt for the ideal insurance for you and your vehicle, it’s essential to understand what you should be looking for in an insurance provider. Many enthusiasts aren’t aware that there is insurance designed specifically for collector vehicles. Collector vehicle insurance policies can differ greatly from policies for daily drivers or other types of vehicles. Because collector vehicle policies are tailored specifically for enthusiasts, there are many advantages to this type of policy. Here is an overview of what you should look for in your search for auto insurance.
Standard vehicle policies vs. collector vehicle policies
One of the most important differences between how you insure your daily driver and how your collector vehicle should be insured is the type of physical damage (comprehensive and collision) coverage the policy offers. On a policy for a daily driver, the comprehensive and collision is paid on an “Actual Cash Value” (sometimes called ACV) basis. These types of policies are undesirable to collector vehicle owners because they will either depreciate the value of your vehicle as time goes on (when in actuality, collector vehicles usually appreciate in value over time) or they will not place a value on the vehicle unless there is a claim. “Agreed Value” is the only type of physical damage coverage that guarantees the full-insured value will be paid in the event of a total loss, with no depreciation. You and your insurance company determine the vehicle’s worth and agree upon its value at the inception of the policy. As a collector vehicle owner, you should make certain this is the type of policy you have– or when there is a claim, you may end up receiving far less than what your vehicle is really worth. For instance, in a “Stated Value” policy, the insurance company is only required to pay “up to” the stated amount on the policy, which could mean the policyholder may not get the full value of the vehicle in the event of a total loss (such as a theft, like in our nightmare scenario). Scary thought.
The second most noticeable difference between standard vehicle insurance and collector vehicle insurance is the cost. Collector vehicle insurance is typically a fraction of the cost of standard vehicle insurance. Two factors that play into much lower rates are the responsible and safe nature of collector vehicle owners and the fact that collector vehicles are used in a different fashion than daily driven vehicles. This translates into lower rates.
The third major difference are the perks that come along with collector vehicle insurance that most standard vehicle insurance policies don’t offer. Many collector vehicle insurance companies have comprehensive towing and labor reimbursement programs set in place. This means if you need a tow, you can select the towing service of your choice, and send along the bill for reimbursement. Some will only charge one liability charge– regardless of how many vehicles you have on the policy– which can mean big savings for collectors with multiple vehicles. And some companies will give you automatic 30-day coverage for new additions to your collection.
How can you qualify for these great insurance programs? Well, in order to qualify for most collector vehicle insurance programs, you’ll have to agree to a few things. First, you have to agree to keep your classic in a garage when it’s not being used. You’ll also need to have other cars in the household that are used for general transportation, so the insurance provider knows the collector vehicle isn’t being used for that purpose. Some companies impose annual mileage limitations, which can be a real downer for some enthusiasts. However, with some insurance companies, there are no strict mileage limitations in most states. Coverage is available as long as you use your regular car(s) for everyday driving and your collector vehicle on a limited basis (for pleasure rides, hobby activities, exhibitions, etc.).
Determine your needs
Sit down and really think about your needs and if your vehicle fits the requirements of the insurance company you’re looking into. Some providers will only deem a vehicle a “collectible” if it’s of a certain age (usually 15 years or older). However, there are factors, other than just the age of the vehicle, that can make it a collectible. What about highly modified vehicles, exotics, new limited-production vehicles, or kit and replica cars? There are a small amount of collector vehicle insurance companies which will consider insuring any make/model and model years. You have to do your homework here.
What if you have a car you’re working on in parts all over your garage? While it may not even resemble a car right now, you know that the value of all those parts is substantial. If you have a work in progress, you should see if the insurance provider is willing to cover the car for comprehensive only and then add collision and liability for full-coverage once the vehicle is in a drivable state. The cost will be minimal and you’ll be protecting your investment in the event of fire, theft, vandalism, windstorm, glass breakage, and other damages that may occur.
Other things to consider
If you’re shopping around, you’ll want to notice other factors. How is their customer service from the get-go? Did you get a machine or were you able to speak with a real person? Were they friendly, knowledgeable, and expedient? This is indicative of how the company will respond if you ever have to file a claim. What other bells and whistles are they offering you? Some companies will let you pick a repair shop of your choice when you have a claim. This is something many collectors view as a necessity. Others offer spare parts coverage for those new exhaust tips in the garage that you have yet to install. Also, compare the other bells and whistles side by side and read the fine print. Are they really comparable? Will your company allow you to adjust the Agreed Value of your classic after the policy is set? That is important, as we all know how fast collector vehicles can change in value.
Most people only think about insurance once a year when their policy is up for renewal. If you take the time to research what’s available to you and make an educated decision, you’ll be pleased with what you’ll get in return for your efforts.
Tips to prevent the worst case scenario
Join a car club! A thief may try to sell your stolen vehicle to someone who has similar interest in a car like yours. Club members are often very unified and would keep an eye out for a fellow club member who has lost his or her car. Always lock your car, close all windows, and never leave valuables in plain sight. This is an open invitation for thieves!
To prevent an accident, dedicate a special section of the garage to your collector vehicle and keep lawn tools, paint cans, the kids’ bikes, etc., in another location.
Never hang anything over or near your collector vehicle. When dry wall deteriorates and screws loosen, it’s only a matter of time before an accident.
Inspect shelves in the garage on a regular basis to make sure they are still secure. Loose screws or bowing in the middle is a sign that the shelf is straining to support the weight being placed on it.
Use good judgment when driving your vehicle. Most accidents happen during rush hour and in crowded parking lots. Be extra careful in these situations!
Ask some of your friends and fellow car enthusiasts who they insure their rides with. With a little detective work, you’ll select the right company and add some much needed peace of mind to your collector car hobby.
by Jessica Fegan