Spring seems to be the time of year that many in the north east will invest in an antique or collectible car, motor cycle, or truck. If you already have such a vehicle, hopefully you’re already taking advantage of the special insurance coverages and pricing that is available. If you’re new to the collectible vehicle market, this is information you will want to know.
Antique or collector vehicles offer unique exposures and controls over a conventional daily use vehicle. An antique car is expected to have a lower risk of loss than a daily use vehicle. These cars are usually well maintained; used during a short season; kept in locked garages; used only for special outings; travel locally; and are operated with a higher degree of care. But, valuing an antique or collectible vehicle brings forth another challenge.
After a total auto loss, a conventional insurance company pays you based on the average retail book value of your car. Included in such a calculation is the depreciated age of the vehicle, its mileage, and maintenance history. If my 1973 Dodge Challenger were “totaled”, that system would not provide me with the same value a collector would have paid for it prior to the loss. Just the depreciation component would have made my car virtually worthless.
What is that vehicle really worth? Typical used car buying guides such as Kelly Blue Book or the NADA Used Car Buying Guide deal with the average prices based on a large sampling of specific models of cars sold during a given period. They cannot accurately indicate the value of an antique or collectible car using that same method. As with all collectibles, these vehicles are sold based on the emotions of the buyer and what the market will bear.
There are some collector guides that generally give a price range for collectible and antique vehicles. Antique or collectible vehicles by their nature, have a limited number still in existence which alone serves to increase its’ value. The individual vehicle’s condition adds or decreases the desirability of the vehicle. The popularity of a vehicle that is reminiscent of a collector’s younger years adds to the emotional value. The combination of the vehicle’s condition, popularity, and availability are the predominate factors affecting the value of your collectible car.
Now how do I insure my car for its collector value? Any insurance company that truly specializes in collectible vehicles offers a valuation method that allows you to cover your vehicle for the value other collectors would pay for it. It should require both you and the insurance company to agree to a value for that vehicle. There is flexibility here. Would an independent appraiser agree with the value you are seeking? Does it fall within the range the antique and collectible guides might reflect? Those are measures that the insurance companies will use when agreeing to your vehicle’s value. This method of valuation is called “Agreed Amount”.
Many insurance companies will claim to specialize in writing insurance for the classic vehicle market. My experience is that a select few have programs that truly reflect that specialty. The most popular insurers specializing in collector vehicles are American Collectors Insurance, Classic Car Insurance, Hagerty Insurance, and J. C. Taylor. These companies have similar requirements, coverages and pricing. All of these companies require you to insure for your liability (damage or injuries done to others caused by you) as well as collision and comprehensive coverages (damage done to your car). They all have restrictions. But if you can live with their restrictions, you could be paying a few hundred dollars annually for the same coverages a conventional insurance company might charge $1,000 for.
Annual mileage and usage are some of the restrictions reflected in their pricing. Most of these programs have annual mileage classification or limitation ranges up to 1,500 miles, 3,000 miles, 5,000 miles, or over 5,000 miles. If you drive your collectible over 5,000 miles it is usually cheaper to insure with your daily use auto insurance carrier.
Another common restriction is who is acceptable as a Driver of your antique. The drivers are usually limited to those specifically listed on the policy and they must have 3-5 years driving experience. The driving history of the insured drivers requires a good driving record with wiggle room collectively for only one or two losses or violations for all those listed on the policy.
Other restrictions include: The vehicle must be kept in a locked garage; The insured must have a minimum of one daily use vehicle insured with a conventional auto insurance carrier; That vehicle must have liability limits equal to the liability limits proposed on the collector car policy;
When a loss happens, what is your deductible? Most of these programs offer deductibles that range from $0 to $2500. With these special programs, selecting a lower deductible does not have a great impact the rate you will pay.
If you’re buying a car with plans to restore it, is it insurable? These programs do offer “restoration” coverage.
Many collectors have taken the opportunity to buy spare parts when they have come available. Should damage or loss occur to these spare parts most of the special carriers offer coverage for your spare parts. It may start with a limit such as $500 that is included with your program allowing you the option to select higher limits.
Towing, rental and trip interruption coverages are optional coverages that generally have broader offerings than available through your conventional auto insurance policy. If your collectible breaks down while attending a show 200 miles from home, you might need accommodations for an extra night or two while you car is being repaired. You might experience increased cost to tow your car home, or simply need to rent a car to get you home. These are all coverages you have the ability to include with your collectible car coverage.
You’ve had a tough winter, happy motoring this summer.