Is your classic car insured on a standard personal auto policy? If so, you’re not alone but unfortunately you have the wrong insurance. Here are three reasons why you should never insure a classic car on a standard personal auto policy.
Mr. Raymond’s Claim
Mr. Raymond contacted my office in June after filing a claim with another insurance company for his 1963 Austin Healey. Mr. Raymond drove his car to play golf one Saturday and while driving on the Powhite Parkway he attempted to change lanes and collided with a car to his right. Both parties claimed they had the right of way but it the end fault could not be determined. When this situation happens each party files a claim with their own insurance for their damage.
Mr. Raymond had a standard personal auto policy and the estimate to repair the car was $22,000. Mr. Raymond thought this was a fair estimate since the car was valued at $56,000. He was shocked to learn his insurance company considered the vehicle totaled and wrote him a check for $7,000. Needless to say, he was calling me to obtain classic car insurance.
Agreed Value
Classic car insurance is an agreed value policy, meaning there is no depreciation applied to the value of the car. If your car is worth $56,000 and the insurance company agrees after verifying auction prices and current sell rates, in the event of a total loss, you will receive a check for $56,000.
By contrast, vehicle values under standard auto policies depreciate – meaning the life expectancy of the car would be subtracted out of the value.
Special Parts
In the event of a loss that requires replacing parts on classic car, a standard personal auto policy tends to default to after-market parts. A classic auto policy would pay for “original” or “liked” parts from the manufacture or custom body shop.
Claims Handling
You don’t want the same person managing a claim for a 2012 Honda Civic managing a claim for a 1963 Austin Healey. Why? Standard auto companies are great for adjusting losses on regular cars but they are not as familiar with classic cars. You want an adjuster who knows, appreciates and handles classic cars.
Contact The Andrew Agency
The Andrew Agency works with companies who specialize in classic car insurance. Hagerty, American Modern and Chubb are a few of the companies who offer agreed value policies. If you have questions about classic car insurance, standard auto insurance or any other type of insurance contact The Andrew Agency at (804) 320-2886 or visit www.theandrewagency.com.
