The situations surrounding antique and collector cars in the last few months is enough to give Jay Leno or Jerry Seinfield a heart attack. The part that probably really gets to those two car enthusiasts is that one of the biggest stories about antique cars this week is about a man who purposefully destroyed his two ‘treasured’ cars. Let’s start with two short stories before digging deeper into the mysteries of classic car insurance:
Chris Deverso of New York had concocted an elaborate plan to defraud his insurer. In Liverpool, NY, Deverso talked a friend, Richard Swartz, from Colorado, to set the two collector Camaros on fire that were parked in a garage. The two cars were worth approximately $70K, and Deverso promised Swartz a cool $10K for starting the fire. Both cars were destroyed as planned—but so was a 40 car bay garage. Now, damages are at $500K. Swartz was also damaged—he suffered severe burns on 40% of his body.
Deverso now faces charges of fourth-degree conspiracy, second degree insurance fraud, and Swartz was charged with both of the aforementioned including third-degree arson (Read the story here).
Not far away in Phildelphia, PA, a garage that housed 15 classic collector cars and 19 additional cars caught on fire the last week of July. A fireman said all cars wouldn’t be able to be repaired. Unlike the Deverso case though, this fire appears to be every car-lover’s worst nightmare and was just an accidental fire that caused immense damage. Most of the cars were owned by car enthusiasts Latin Cruisers Car Club, which has existed since 1991 when Hispanic antique car collectors and enthusiasts felt they weren’t welcome in their city. The value of all the cars destroyed? A painstaking $1 million.
While some collector cars and antique vehicles are burning to the ground, some insurers are attempting to expand services to them. Mid-August, 2012, popular auto insurer Geico re-launched their collector car insurance line due to customer demand, but maybe although due to the fact that executives leading Geico are collector car enthusiasts themselves.
If you’re a car collector and prefer an ‘old car scent’ versus a ‘new car scent’ then stories of beautiful, classic, immaculate cars burning to ashes is a horrifying thought. Although you may not be committing insurance fraud, it’s reminders like these that make it worth re-evaluating the coverage on any classic cars or antique cars you collect. Often people are surprised to find the many options as opposed to standard auto insurance, meaning reviewing your coverage annually is crucial, especially since collector cars can appreciate in value. Because of the way this specialty insurance works, you need to be on top of appraisals and more than thorough when it comes to insuring your vehicles.
Classic Cars Have Special Coverage Needs – A Normal Policy does NOT do the Trick
For whatever reason, more than a few classic car buffs forget about one of the most important things regarding antique cars though. Some think it’s sufficient to just add that antique vehicle to their existing automobile insurance policy. Even though we know that our new old car is a valuable investment which appreciates in value while our other vehicles depreciate, it simply doesn’t register that we are inviting disaster. For some, the lesson comes after an accident when your tenderly restored classic is destroyed and your insurance policy wants to treat this piece of history as just another old car.
Let’s say you bought your 1975 Duster for $2,000, and now you’ve learned that its current value is $16,000. However, with the expensive paint job and new upholstery you’ve recently had done, you may well be able to sell that same vintage Duster at a car show for $20,000. Wow! Now imagine that your Duster got hit by a passing freight train. If your Duster is just another vehicle on the same policy as your SUV, you’ll have to be happy with the $2,000 you initially paid.
Chose The Right Insurance
Another common misconception some of us have is that if our Duster is parked in our garage when the house burns down, it will be covered as part of your personal property. Wrong. Your investment in a vintage vehicle deserves to be properly protected by the right insurance policy.
Insure the Real Value of Your Car
When shopping for insurance for your collector’s car remember to be sure the policy insures your investment adequately. Make sure the insurance value of the vehicle is the same as its actual value. Is the car insured at cash value, stated value or agreed value? Be careful that you understand how your insurance company defines these terms which are usually characterized as follows:
- Cash Value: This is the standard for regular auto insurance. If you are insured for cash value, you’ll receive the cost to replace the vehicle less depreciation. As in the case of our Duster, we’ll be lucky to get the $2,000 we paid back in 1975.
- Stated Value: Here you tell the insurance company what the vehicle is worth and they insure it for exactly that. Of course, when it comes to a loss, there may be a deductible and there may be some disagreement with your adjustor concerning whether or not your stated value was reasonable.
- Agreed Value: This is the sort of policy most commonly used for antique or vintage cars. You will agree ahead of time with your agent on the value of the car. This is an excellent time to obtain an appraisal on your vintage car. (And be sure to update the coverage as you make improvements to the vehicle.) Don’t forget to ask about deductible amounts and whether they apply to your policy before you buy.
How to Get Insurance for Your Classic Car
Insuring antique vehicles can be a costly proposition, so its not surprising that insurance companies can be a little fussy about who they will insure. In order to be eligible for coverage and to get the best value in a policy here are a few guidelines:
- Keep a clean driving record
- Have ten years of good driving history
- Do not put a young driver or a driver with a questionable history on a policy with your collectible car
- Make sure you have a safe place to store your vehicle – not on the street
- Insurance companies often ask the insured to prove that the antique auto will not be the only or primary mode of transportation. There may be a limited number of miles you may drive your antique car in any given month.
As with all other insurance policies, it’s important that you understand your antique car coverage very well. Your insurance agent will be happy to answer your questions and help you find the best policy for you. Or maybe you just compare quotes and talk then details.