Wednesday, November 7, 2012

Protect Your Classic Car or Muscle Car From Theft With Specialty Insurance

by Andrea L. Algar
Motorheads Performance

In my series Keep Our Rides Safe, we're taking a systematic look at steps we can take as owners of classic cars, muscle cars, antique cars, street rods, hot rods and vintage trucks in order to keep our cars safe from theft.
Car Theft is just one reason
you need specialty insurance
We've looked at security when we're at home and on the road and even though more than one third of all car thefts occur from a home or residence, it is all too common for owners of classic cars or muscle cars to procrastinate about insurance that will not only provide needed protection, but a lot of peace of mind! Many fear high prices, poor coverage, or too many restrictions being placed on use of the vehicle.

Some enthusiasts think that these types of insurance are available only for vintage autos that only drive once a year in parades, and while this is available, there are in fact many other options. Purchasing a policy for a "less-than-perfect" car, or one needing a restoration is also often avoided, but you should know that they're not as expensive as you might imagine. Standard auto premiums can cost up to 500% more than specialty insurance policies! And, you can usually find a policy which is just right for your particular needs.

Specialty automotive insurance can help you recover from all types of loses including those from theft, fire, accidents and collision and other catastrophes that can happen when we least expect it, and certainly can occur when we're least prepared for them. We may insurance, but still have a policy that leaves us unprepared and poorly covered. How?

Some people rely on homeowner insurance to cover theft losses, especially when they have a project car needing restoration or a lot of repair before being put on the road. Most people have the notion that insurance is not needed unless they drive it, but this can result in costly losses. Not only can an insurance disallow a claim, but more than likely even if they do, a claim will result in far less than the vehicle's value. Homeowners insurance is not a good substitute for insurance designed especially for classic cars or trucks!

Many people select a policy from their traditional auto insurance carrier, not realizing that this can be robbing them of valuable coverage not offered by standard auto insurance, and perhaps even paying a premium for the privilege! Specialty insurance policies can be less expensive than those through your standard insurance carrier even taking into account multi-car discounts, alarm discounts, "clean driver" discounts and loyal customer discounts. Lumping your classic car coverage with your daily driver policy through Geico, Travelers, Progressive, Allstate or any of the other dozen automobile insurance carriers will usually end up costing you in the event of a claim. Why?

Standard auto insurance typically pays "Actual Cash Value" (ACV), also called "depreciated book" or "replacement cost minus depreciation." The older a car is under this type of policy, the less value it has - regardless of the premium you pay. It is usually not the best choice for classic cars, antique cars, muscle cars or vintage truck.

Some auto insurers offer a "Stated Value" policy. These are better than an ACV policy because they allow you to "state" a value greater than its depreciated "book" value. But, the Stated Value policy still depreciates vehicles. The best collector policy is called "Agreed Value" - meaning the full insured value of the vehicle is guaranteed - no depreciation and no hassling with an adjuster trying to prove your vehicle's value.

One example is a policy offered by Grundy Worldwide Insurance called Collector Car Insurance. This insurance is very affordable, and YOU have control over much of the cost because you actually work with Grundy to arrive at an "Agreed Value" when your policy is written. If an accident or theft occurs, you receive the agreed upon value - no questions asked! A car with $20,000 in restoration costs could be insured for about $120 per year. There are no restrictions on the number of miles you can drive, or how often you drive, as long as it is not your daily driver. (See other insurance options below for daily drivers.)

Another policy for collector cars offers coverage while your vehicle is in the process of being restored. What's unique about Restoration Coverage is that the policy value can increase as the restoration continues. So, as the value of your car (and the money you have invested into it) grows, so does the amount of coverage on your policy. We think this is a terrific "peace of mind" policy, and embraces the gift of classic car restoration - to get out on the road and enjoy your ride!

For more information on insurance for your classic car or street rod, try contacting the following insurance companies who specialize in these policies.

Grundy Worldwide Insurance 800-338-4005
* Grundy, a top pick for classic car insurance in's research

Hagerty Classic Insurance 231-941-7477

J.C. Taylor Insurance 800-345-8290

Heacock Insurance Group 800-677-5171

Leland-West Insurance 800-237-4722

American Collectors Insurance 800-360-2277

Classic Auto Insurance 800-360-2277 or 800-397-0765

Rally Insurance 800-801-1823

Condon & Skelly 800-257-9496

Northeast Classic Auto Insurance 800-866-6440

"Chrome" by American National 800-333-2860

American Hobbist 800-395-4835

Collector Car Insurance Agency 800-787-7637

Sneed Insurance 800-619-7827 

Motorsports Insurance Services 310-301-0333

NCM Insurance Agency (specializing in collector insurance for Corvettes)  877-678-7626

Other options exist as well, including policies for Daily Drivers which are usually far less than going through a traditional auto insurance company. Some companies do require that you own another vehicle for "daily use", but you do not need to have it insured through them. Some put restrictions on mileage while others do not (especially if you have another vehicle as your daily driver). And, just as some place mileage restrictions, some restrict what type of driving you do (i.e. parades or shows only), and age restrictions (most will not insurance drivers under 25 years of age...others 30!). Many companies offer all-in-one policies which insure all of your vehicles at significant savings.
A note to anyone who owns a street-strip car is to take the time to find an insurer who will issue a policy for that use. If you don't "come clean" up-front, and your car catches fire at the drag strip, many insurers will not pay out on a claim unless you had a rider for racing. It doesn't hurt to be honest about how you use your vehicle, and it's a lot better than having a zero payout when catastrophe strikes. You put yourself in a position of higher risk, so take the time to protect yourself. There are insurance plans for just about every type of enthusiast out there.

Appraisals are usually never necessary, although most require photos of your vehicle to help determine value. Some insurers may dig a little deeper into the mechanical and aesthetic modifications made to your car, its horsepower, suspension system, paint, etc, but this usually helps to give you a higher Agreed Value if desired. Guy Algar states, "Don't forget to contact your insurer once the restoration is complete so that new values can be determined and you can increase your coverages if needed, or if you started off with Restoration Coverage and want to change to a different type of policy. We advise you to keep all of your restoration records including the detailed lists of the work performed, photos, and receipts for all your parts and labor, as this will help greatly when establishing the new value of your vehicle."

I suggest comparison shopping. Check the agency's rating, their level of customer service, and details of the policies offered in addition to pricing. Research all programs before making a final decision. Guy Algar advises, "Insist that the information provided truly allows you to compare 'apples to apples', and that similar language is used to address deductibles, payout limits, covered events, how values are determined, and of course exclusions that will not be covered at all. It reminds me of a story a customer retold of a friend's experience when, following a total loss, the claim processor matter-of-factly asked why they didn't have a policy that covered all the work done to the classic car. Well, the person simply didn't know that there were other options, and it cost them thousands."

Guy Algar and I believe that for such a low cost, collectors insurance is a worthwhile investment. We recommend Restoration Coverage for anyone who is having partial or full restoration services performed on their classic car, muscle car, antique car, vintage truck, street rod or hot rod. It can help give you added protection if you're taking your car to a professional restoration shop, as well as if you are performing the restorations yourself! You don't want to be the victim of theft, fire, or other event that could jeopardize the time, money and energy you've put into finding your prized ride.

Andrea L. Algar is co-owner of a classic car performance and restoration design shop in Leesville, Texas. Motorheads Performance specializes in repairs, maintenance, performance upgrades and restorative work on cars and trucks from the 1920’s through 1970’s. Her husband Guy L. Algar is a Mechanical Engineer with over 25 years experience. He holds 5 ASE Certifications from the National Institute for Automotive Service Excellence and has been working on old cars and trucks for over 37 years. Together they share their passion for old cars and trucks with other enthusiasts from around the country.
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