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Things to Know About Collector Car Insurance
Things to Know About Collector Car Insurance
By: McKeel Hagerty
Contributed to the Z Car Home Page
Insuring classic and collector cars can be confusing for first-time buyers and veterans alike.
Many questions arise as to the types of vehicles that can be covered, coverages, costs, claims,
etc.
How are most collector cars insured?
Less than half of the collector vehicles on the road today
are insured by specialty programs. Although, collector car insurance has been available for five
decades, most owners of collectibles, specialty cars and street rods are still insuring them through
a standard insurance company despite the higher cost and often more restrictive policies.
Are specialty insurance program premiums less than standard insurance premiums?
Yes. Standard
insurance annual premiums can cost up to 500% more than those offered by a specialty program.
Although standard companies provide adequate coverage for the "daily driver", they rarely offer
the added benefits associated with collector car programs. One example is that a stock vehicle,
valued at $10,000, can be covered by Hagerty Classic Insurance for as little as $90-95 per year.
What are the different kinds of insurance coverage?
There are three types of automobile insurance
offered today: Actual Cash Value (ACV), Stated Value, and Agreed Value. ACV coverage is what
insures most everyday cars and pays out a depreciated "book" value in the event of a claim: the
older a car is on an ACV policy, the less value it has. Some insurance companies offer Stated
Value policies for collectibles. These policies are better than ACV because they allow you to
"state" a value for your vehicle greater than its depreciated "book" value. But, Stated Value
can still depreciate vehicles because the policies generally require the insurance company only
pay "up to" the "stated" amount. Only Agreed Value insurance policies guarantee you will get
all of your money back in the event of a total loss. There is no depreciation of a car's value
with an Agreed Value policy.
What kinds of vehicles are collectible?
This is a difficult question to answer briefly because
the market is broadening so rapidly. It's not just Ford Model A's, '57 Chevys and Packards anymore.
Now, Hot Rods, muscle cars, vintage pickups, vintage racers, sports cars and even 70's cars are
being collected. The old categories of "antique and classic" are still there for the purist,
but today people are colleting more and different cars than they used to. Yes, even AMC Pacers
are finding a niche within the hobby, especially if they have the Mojave stitched interior option!
Do specialty insurance programs have a vehicle age cutoff?
While the old standard used to be
25 years and older, it is always best to inquire on a per-vehicle basis. We take a much broader
view about the age of the vehicles we will insure. There are new cars that are insurable as
collector cars. These tend to be exotics and sports cars, however.
Do collector car programs impose mile restrictions?
Many specialty programs strictly limit owners
to driving their collector vehicles to 2,500 miles per year. They may even require annual odometer
readings. Our insurance offers flexible usage guidelines. This means that if a person has regular
cars that are driven daily and their collector cars are used on a limited basis consistent with
owning a valuable vehicle, then we do not strictly limit the mileage they may drive.
Am I limited to driving my collectible only in parades or shows?
What if I want to take a Sunday
cruise? Enthusiasts like to share their collector cars with the public but they also just enjoy
driving them around. While some programs require that collector cars are only to be driven in
activities of public interest, we also allow for and encourage the private enjoyment of collector
cars.
Are there other usage limitations?
Yes. Most specialty insurance programs, including Hagerty -
do not allow vehicles to be used for the commercial transportation of goods or passengers, for
racing, or for daily transportation.
Are young drivers covered in a specialty insurance policy?
It depends. Many specialty insurance
companies require that all drivers be 25 or older; some even require that a person be 30 years old.
While Hagerty generally will not consider an owner/applicant who is younger than 21, we are somewhat
more flexible when a family of collectors has teenage drivers with clean driving records.
What is the determining factor of computing an annual premium?
First and foremost, insurance is
regulated on a state by state basis, so there are slight differences from state to state, but
generally they are fairly consistent. Physical damage coverage, comprehensive and collision,
makes up the majority of a given premium. This is calculated by the value of the car and its age.
For example: the physical damage price on a 1965 Mustang worth $10,000 is $60 with Hagerty; if the
car was worth $20,000 then the physical damage rate would be $120. Liability coverages are much more
complicated to explain, but fortunately for consumers they are very inexpensive, usually somewhere
between $30-50. And with Hagerty, in most states, we charge liability only one time. So no matter
how many cars you own, we charge that $30-50 only once. We even have a customer with 2,007 cars and
is charged only one liability charge.
© 2007 Triad Z Club
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