When I was 12, I was enthralled by a neighbor’s classic car. He’d restored a 1920’s Model A pickup and painted the body a deep green color with black fenders. The interior had been completely restored with new leather and all new wood for the bed and side rails. The rounded head lights were chromed along with the radiator, single tail light and horn. It gleamed in the light as he’d drive it around the neighborhood on the occasional weekend jaunt.
That Model A truck inspired me to subscribe to Hemmings Classic Car which had a publication listing classic cars and parts for sale. Each month when it arrived in the mail, I’d pour over the black and white photos of Model A’s, Model T’s, Packards, Cords, and other cars and dream of what I’d buy and restore for my first car.
I never bought one. The closer I got to 16 the dream changed to Mustangs, Chevelles, Barracudas, GTOs, Camaros, and Firebirds. I still love these cars and appreciate the work, time, and money it takes to restore one completely. The sound those engines make with the right muffler is like nothing else.
I revisit that time of my life when I write a classic car policy. Insuring one of these “time machines” is different from insuring today’s cars for one major reason and several supporting ones.
- Insurance policies for current vehicles are written as actual cash value policies which mean any claim is paid on a depreciated value of the car. As a car ages less money is paid if it’s totaled or stolen.
- Insurance policies for most classic cars are written an agreed value basis where the owner establishes what the car is worth based on what it was purchased for and the amount of work that’s been put into restoring it.
Insure a classic car on a current car policy and even a dented fender could result in total loss with a laughable value on a nicely restored vehicle. Any discussion on a classic car (motorcycles and boats too) covers the following items:
- Value
- Modifications
- How it’s driven
- How it’s stored
Value: Establishing the value of the car covers establishing what the owner paid for the car, the value of the restoration to date, and what its current market worth is. We also review what future restoration work will be done, the timing of that work and its ultimate value once that work is completed. This is reviewed with an underwriter that specializes in classic car insurance to confirm the value is in line with the market so we don’t under or over insure the vehicle.
Modifications: Knowing what modifications have been made is also important when insuring a classic car.
- Modifications to a restored antique car can radically change its value downward.
- Modifications to a classic GTO, Chevelle or Mustang may increase or decrease the value.
- Certain modifications may also limit who will insure the car.
I worked with a prospective client last year who’d heavily modified an early model Dodge Dart. The rear wheel wells had been tubbed to accommodate extra wide tires, a roll cage had been installed along with a nitrous tank where the back seat once resided. Two of my carriers that specialize in classic cars backed away from insuring the car due to the presence of the nitrous system. The owner had previously raced the car and neither insurer wanted to pay a $20,000 claim on a car that burned from a nitrous system malfunction or was wrecked if the owner decided to take one last run down the Ennis drag strip.
Driving: Another major factor is who drives the car and how it’s driven. The questions that must be answered are:
- How often is the car driven?
- Who drives the car?
Cars that are taken out only on weekends, used in shows, meets and in parades are insured one way and at a lower cost than cars that are driven to and from work or on a more frequent basis.
Who drives the car is also important. I’m working with a potential client on a beautifully restored Chevelle that’s been a mom / son project. The insurance will cost less if the mom is the primary driver instead of the son. If this becomes the son’s car it will cost much more to insure it.
All of these issues are reviewed with underwriters to make sure the car is properly insured. Getting it wrong could end up in a claim being denied and no one wants that.
Storage: The final issue I cover with the owner is where the car is stored. If it’s stored in a locked garage at the owner’s home the insurance costs much less than if it’s parked in the drive way, or on the street, or in an apartment parking lot. Classic cars can be assets and should be treated as such.
Not every insurance company can insure a classic car on an agreed value basis. There are several that can’t and insure it the same way they’d insured a Honda Accord, Ford Taurus or Toyota Camry. If you own a classic car, be sure to talk with your agent to make sure it’s completely protected. If not, find someone who can.
Do you have a classic car you’re proud of? Share your photos and stories with us on our Facebook or Google + pages. I’d love to see a picture of your ride and learn what you’ve done! If you have a comment, question or experience you’d like to share, please let me hear from you too.
