What is the difference between insurance policies?
Actual Cash Value:
What a conventional car insurance policy pays for a total loss. They determine the current value of your vehicle by checking resources such as local papers, the NADA Guide or Kelley Blue Book and then deduct depreciation.
A value is stated in the policy, but the insurance company will pay up to that amount-and they can pay less. A Stated Value policy may pay you less than the amount you and the insurance company wrote in the policy, even if your vehicle is a total loss.
Agreed Value: The insured and the insurer agree upon a value that`s written into the policy. In the event of a total loss, it`s guaranteed to be paid, minus any deductibles. It is the only way to guarantee the value of a vehicle in the event of a total loss.
Frequently Asked Questions
1. Are most collector cars insured by collector car insurance programs?
No. Specialty programs today insure less than half of the collector vehicles on the road. Although collector car insurance has been available for nearly 50 years, 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.
2. Do specialty insurance programs cost less than standard insurance?
Yes. Premiums at standard insurance companies can cost up to 300-percent more than a specialty program. Although standard companies provide adequate coverage for the "daily driver," they rarely offer the added benefits associated with collector car programs.
3. How different are insurance programs for collector vehicles?
Levels of service, rates and types of coverage and claims handling all vary from program to program. Anyone insuring a collectible should research all programs before making a decision. Varying costs should be considered, of course, but shouldn't be the sole determining factor. Remember, you are buying a service, so look for quality customer service, excellent claims handling, a knowledgeable staff who know and understand collectible vehicles and overall stability of the program.
4. Aren't there different kinds of insurance coverage?
There are three types of auto insurance offered today: actual cash value (ACV), stated value and agreed value. All three are explained in the Insurance Information document.
5. Are vehicles of all ages considered by specialty insurance programs?
As noted in the text above, in addition to autos 25 years and older, some specialty insurance programs now consider newer vehicles such as exotic and sports cars like Ferraris, Porsches, Corvettes and Vipers. It's best to inquire on a per-vehicle basis.
6. Do collector car policies impose mileage restrictions?
Many specialty programs limit owners to driving collectible or classic vehicles or street rods to only 2,500 miles per year. Companies such as Hagerty offer flexible usage guidelines and encourage collectors, especially those who are true hobbyists, to drive and enjoy their vehicles. Hagerty (and most all of the Collector Car specific insurance companies), however, does require that the collector or hobbyist own a daily driver that is used and separately insured for everyday driving.
7. Must I drive my collectible only in parades or shows? What about a Sunday cruise?
Enthusiasts like to share their collectible car or truck with others. This could be during a Sunday drive or displaying the vehicle in parades and shows. Some programs require the vehicle be in the owner's presence at all times when not in the garage. Collectors should consider these types of restrictions and find a policy with flexible usage guidelines that best suit their overall needs.
8. How do I value my vehicle?
There are many factors considered when valuing a vehicle. The first thing is whether the car is a stock original vehicle. If so, there are many resource guides and pricing books that provide value guidelines based upon the overall condition of the vehicle. But, because every modified car is different, valuation is more difficult. The best way to value a modified vehicle or street rod is to keep detailed lists of all restoration work and any added after market and performance parts, receipts for all parts and labor and any documentation describing work done on the vehicle. Appraisals are very important to document your vehicles value.
9. Is it important to consider insurance before purchasing a collectible?
Definitely. Insurance is often a mandatory requirement of owning a vehicle, as well as a necessity for protecting your investment. Therefore, you do want to consider your potential insurance costs. Interested hobbyists and collectors can now afford to own, insure and enjoy their classics because specialty insurance programs offer lower rates than standard insurance companies. For collectors with several vehicles, some programs, offer a single liability charge rather than a charge per vehicle.