CW: A regular auto policy is based on Actual Cash Value, so you’re not going to get the true value of your collector vehicle. A collector car policy should be based on Agreed Value. Everything else is the same as a regular auto policy, except that it’s a limited use policy. The liability, medical coverage, and the uninsured motorist coverage are all the same, because that’s all limited by the states.
PR: Can you explain the difference between Actual Cash Value, Stated Value, and Agreed Value policies?
CW: There’s a big difference. The only kind of coverage you should have is Agreed Value. That means that when the policy is written, the value of the vehicle is already determined, so if there’s a total loss, that’s the amount of money you will receive. Regular auto insurance is based on Actual Cash Value, which declines over time. Under a Stated Value policy, you have to supply documentation to support the value on the date of loss. Plus the insurance company will have to do research on the value, so if you have $50,000 into your car, but you can’t come up with the paperwork to prove that value, the insurance company may come back and say they think it’s worth $25,000. An Agreed Value policy guarantees the value of your car. That’s the key thing. When people are ready to purchase collector vehicle insurance, that’s what they have to look for, that the company provides an Agreed Value policy. If you don’t have an Agreed Value policy, you could be throwing away your payments.
PR: What kinds of cars are eligible for collector insurance?
CW: With some companies, the vehicle has to be 15 or 25 years old, or older. But at our company, we don’t have an age limit in most states. We’ll insure newer exotic vehicles, but we won’t insure a mom-and-pop car for going to the store. It has to have some kind of collector status.
PR: What is the process to obtain this insurance?
CW: It’s pretty simple. We ask for an application, which we send out. The customer fills it out and mails it back to us with the state forms, the completed application, a couple good pictures of the vehicle, and a check. Then it goes through an underwriting process, and if everything is approved, we write the policy the same day.
PR: Are there collector cars you will not insure?
CW: I have cars insured for $10 million, but there are some companies out there that have limits on value. If they couldn’t write it, the customer would have to go through another company or get reinsurance. We have a minimum value of $5,000, but if a collector has an existing policy with us and buys a less valuable car to restore, we would insure it as an accommodation. Because when it’s restored, it is likely to be worth more. We insure vehicles in the process of restoration, because in today’s world, you have cars that people will purchase for $25,000, but when the restoration is done the car will be worth $150,000. You still have a $25,000 investment at the beginning, and that’s what you want to insure.
PR: How about a collector’s driving record?
CW: We base our rates on a clean driving record. We’ll allow one or two traffic tickets in three years, or a major speed violation as long as it was just one in a three year period. But if there are a lot of violations on a motor vehicle report, we would decline for that.
PR: How do the costs compare between standard and collector insurance?
CW: The premiums for collector car insurance are about 75% lower than for standard auto insurance. The average policy is running between $150 and $300.
PR: Is is possible to insure hot rods and modified/custom cars as well as original and restored collectibles?
CW: We’re actually the leader in the street rod insurance business. We have a major sponsorship with the Good Guys organization. A lot of companies separate stock and modified policies, but we put them right on the same policy so you get your multi-car discount and the same coverages for restored and modified collector cars.
PR: What kind of driving and showing is a collector allowed to do under your coverage?
CW: We offer unlimited mileage as long as the vehicle is not your daily transportation. The vehicle can be used for club and hobby use, car shows, parades, and occasional pleasure drives. You can drive your any time you want, so long as it’s not your daily transportation, and not used for racing. Also, all vehicles need to be kept in a fully enclosed and locked garage. That’s because of the rates. To insure a vehicle at a low price, you have to have some kind of security.
PR: Do you offer coverage for cars used in racing?
CW: We allow touring around a track, such as at Good Guys events, but if a car was used in competition, the coverage would be null and void. Some companies will insure a racing car, but they don’t insure them against damage when they’re on the track.
