Do you get weak in the knees looking at pictures of a Shelby Cobra, an Ultima Evolution, Catarham Seven or a Kirkham 289 Coupe? Do you dream of a Lister Bell STR, the Lamborghini Diablo, or the Ford GT40? You may not be able to afford the real thing, which can cost hundreds of thousands of dollars, or more, but there is a way to come close with a kit car. There are some amazing car kits with nice engines and the perks of our current vehicles for those who are interested. The issue I’d like to address is what kind of car insurance does a kit car need?
I answered this question for someone who was referred to me a couple of weeks ago. He owns a hot rod kit car based on a 1940’s era Ford. It’s a beautiful car with a chromed short block V8 engine, short windshield, leather seats, and a paint job to warm the soul. It also has a deep meaty rumble coming from the chromed side pipes that run the length of the car.
The limitation of writing a standard car insurance policy on such a vehicle is that it doesn’t consider the kit car’s completed value. A standard policy operates on a depreciation basis so if the car is in a wreck, then the claim will be paid on the vehicle’s depreciated value which may be much less than it’s completed value. The only way to get around this, is to write a car insurance policy which covers the vehicle for its stated value. This is the same approach we take when writing a classic, collector, or authentic antique car (see https://wiseinsurancegroup.com/car-insurance-classic-cars/).
In this individual’s case, the value of his completed kit is over $30,000. Depending on the kit type, underlying frame, and engine, kits can go for several times this person’s hot rod which is why a stated value policy provides the most complete protection for the owner’s investment. There are a few items an underwriter will want to review before writing a policy including:
- Is the car street legal?
- Was the kit built by the owner or someone who specializes in building cars?
- Can it be driven over 50 mph?
- How often will it be driven?
- Is it registered / titled to the person seeking the policy?
- Proof of its value such as a purchase receipt, appraisal, etc.
- Pictures of all four sides, the interior, and in some cases, the engine compartment of the vehicle.
Not all carriers will require this information, but it does mean there are more options to choose from. In addition, this type of car insurance doesn’t cost an arm and a leg either. It’s very affordable depending on the vehicle’s value and what better way to protect your investment than with a policy covering it for what it’s worth?!
Do you own a kit car? Share your pictures, questions, comments, and experiences with me on my Facebook, Google +, or LinkedIn pages. I’d love to hear from you!
