| Collector vehicle insurance Q & A
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Laura
Bergan is a licensed agent and marketing representative for
American Hobbyist Insurance, a national agency providing collector
vehicle insurance. If you have questions you would like to ask
Laura, please email
her your questions today: |
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Sponsored by American Hobbyist Insurance
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Ask Laura your questions
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Q:
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A friend of mine recently bought a collector policy & I couldn't believe how cheap it was ($140/year). Is the product somehow inferior to standard auto insurance?
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A:
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Actually, quite the contrary! American Hobbyist provides collector vehicles with "Agreed Value" coverage, which means that the full insured value of the vehicle is guaranteed in the event of total loss. By contrast, most standard auto policies to not recognize "collector" values and cover vehicles for "Actual Cash Value" (translation: replacement cost minus depreciation).
The reason that collector policies are generally less expensive than regular auto policies is that collector vehicles pose a smaller risk of loss than cars that are used everyday. Collector vehicles are used very "gently" and most spend a lot of time (let's face it) in the garage - thus reducing the insurer's risk of damage or loss. Specialty providers like American Hobbyist are able to pass along that decreased risk to the consumer in the form of lower premiums.
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Q:
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I have a collection of 4 Corvettes, ranging in years from '59 to '02. They are all used for car shows and never driven for "regular" use. Is there some type of discount for insuring them all since I can obviously only drive one at a time?
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A:
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You can think of collector vehicle rates as "discounted" rates since they are generally so much lower than standard auto insurance rates. They are low because they take into account the fact that collector vehicles are used "gently" in the manner you describe. Cars insured through collector programs are also usually garage-kept with low annual mileage, further justifying a reduced rate. Additionally, certain collector programs such as American Hobbyist Insurance charge only one time for liability (and not per vehicle, as with most standard auto policies).
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Q:
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Where does a person get adequate coverage on a collector car valued at $25,000 and driven daily 6000 miles a year?
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Since your classic car is a daily driver, you're not going to qualify for "collector" car insurance, which limits driving to pleasure and hobby use only. My suggestion would be to contact (or have your agent contact) a "regular" car insurer that offers "stated amount" insurance. A stated amount policy states the value of the vehicle on the declarations page of the policy, and in the event of total loss, the insurer is obliged to pay up to the amount stated. Thoroughly document your vehicle & keep good records in the event you ever do have a claim. You're going to pay more for this kind of insurance, but the only way to pay less would be to agree to restrict your usage & use a different vehicle for everyday transportation.
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Do I need to get an appraisal of my vehicle before I apply for collector vehicle insurance?
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A:
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Unless you have an extremely rare or valuable vehicle, probably not. Some specialty insurance providers may require an appraisal, but American Hobbyist Insurance isn't one of them--unless your collector vehicle is extremely rare and/or valuable. While appraisals certainly aren't a bad thing, you don't need to spend a couple of hundred dollars on one if you are fairly certain of your vehicle's value (based upon recent purchase price or listing in an old-car pricing guide). Since American Hobbyist provides "Agreed Amount" insurance, we'll let you know before binding coverage if we think your requested value is too high or too low.
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Why shouldn't I insure my collector vehicle with my other family cars? I get a multi-vehicle discount through my personal auto insurer.
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There are actually two good reasons why you shouldn't insure your collector vehicle with your family cars: 1) coverage, and 2) price. You should consider buying collector vehicle insurance for the following reasons: 1.) Better coverage. Standard auto insurance typically pays "Actual Cash Value," or "replacement cost minus depreciation." A collector policy, on the other hand, such as the one offered by American Hobbyist, typically pays Agreed Value --meaning the full insured value of the vehicle is guaranteed in the event of total loss. No depreciation, and no hassling with an adjuster trying to prove vehicle value. 2.) Less expense. Collector insurance rates are typically much lower than standard auto rates because specialty insurance providers recognize that collector vehicles do not present the same risk of loss or damage as "daily drivers."
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Laura Bergan is a licensed insurance agent providing general advice as "Ask Laura." Responses are based upon her knowledge of the collector vehicle insurance market and the rules/regulations governing insurance in her resident state. However, any advice given in response to an "Ask Laura" question should be construed as general advice only, and should be confirmed by a licensed agent residing in your state.
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Ask Laura your questions
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Visit
American Hobbyist Insurance
for a free online quote to insure your vehicle or
call 800-395-4835.
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