In Part-I and Part-II of this series, you learned how pre-purchase inspections and appraisals, as well as classic car financing, can help you own the perfect "new classic" EFI GM vehicle.
In Part III, we'll be covering classic car insurance. While many enthusiasts know what it is, some still don't use it to cover their performance vehicles—especially late-model drivers like us. Many don't know about the myriad services included with a classic car insurance policy, some of which can come in handy when you actually need them.
GMHTP reached out to Hagerty Insurance, a well-known company that specializes in classic car insurance and values, to discuss insurance. Based in Traverse City, Michigan, Hagerty offers classic car insurance policies in all 50 U.S. states, Canada, and even the U.K. We did a little Q&A with Hagerty's Public Relations Manager, Jonathan Klinger, and learned a lot from his answers. Keep reading, and we're sure you'll do the same.
Full disclosure: your author is a Hagerty Insurance customer, and has used several different collector car insurance companies in the past.
What are the biggest misconceptions about collector-car insurance?
People sometimes think that collector car policies, through Hagerty, are only for high value, best of the market cars. This is simply not true. We offer coverage for a wide range of collector vehicles; from something valued at $3,500, all the way up to rare vintage Ferraris that often grab the headlines for multi-million-dollar sales.
Another popular myth is that collector car insurance is strictly for car shows and parades. While we do not want you to use your classic vehicle as a daily driver, we believe that classics are meant to be driven, and we do want you to enjoy your car. That means, in addition to car shows and other events, you are also covered for other pleasure driving, including an occasional drive to work on nice days.
These days, do most enthusiasts know about collector-car insurance?
While it is becoming more common knowledge that specialty insurance for collector vehicles exists, many people still continue to insure their classic on the same policy as their daily driven vehicles. There can be a variety of reasons that they do not have specialty insurance; including, thinking they don't qualify, thinking it is more expensive, or thinking that they cannot keep their current insurance agent.
How is collector vehicle insurance different from standard car insurance?
The main difference is that a classic car policy, from Hagerty, offers Guaranteed Value coverage, rather than the more common Actual Cash Value or Stated Value polices. Unfortunately, the classic car owner may not notice the difference until they experience a claims situation, where our Guaranteed Value policy pays out the full value that the insured and the company determined, when the policy was issued.
What questions do potential customers ask the most?
Potential customers often ask about usage or mileage limits. They are curious to know if they can still enjoy their car for Sunday cruises, or occasionally drive to work during nice weather. At Hagerty we believe classic cars are happier when they are driven, so our policies don't limit those activities.
How do you decide which vehicles and years are eligible for coverage?
The simplest way to look at this is Hagerty insures the fun car you don't have to have. This means we do not have a specific year cutoff when we look at applications, but more of how the car is used. When looking at modern vehicles, we often look for a history of collectability or a limited production for that model, in addition to its intended usage.
Are there restrictions on late-model vehicles 25 years and newer?
Concerning late model vehicles, we will ask questions on how you plan to use the vehicle, and verify that the policy holder meets our requirements of having a regular use vehicle for every driver in the household, in addition to their collector vehicle.
Are there any state-specific issues regarding collector vehicle policies?
There are a few states that have unique insurance regulations concerning classic vehicles. For instance, there are regulations in Massachusetts that prevent us from insuring cars newer than 15-years old, on a collector policy.
Are there restrictions on a collector-car insurance policy holder, like mileage caps?
Here at Hagerty, we want you to enjoy your car. There are no specific usage restrictions written into the policy. We do require proof of storage and proof of a daily use vehicle for each licensed driver in the household.
What kinds of perks do collector-car policies have?
Our Hagerty Plus roadside assistance program helps out when everything doesn't go as planned while driving your vehicle. This membership also includes a subscription to Hagerty Classic Car Magazine and membership in the Historic Vehicle Association. Also, we offer specialized policies for Automobilia (i.e., vintage gas pumps), and vehicles that are still under construction or undergoing restoration.
How do you determine a classic vehicle's value?
We have a team of experts who can help determine the value a vehicle, based on our large database of auction sales, private sales, and also comparable cars we have insured. We work with the customer to help determine the value of the vehicle for their policy.
Does your company require or recommend an appraisal?
We typically do not require appraisals. If the vehicle is of such rarity that we cannot substantiate the value the customer is requesting, or if the vehicle is significantly modified, we may request a third party appraiser look at the vehicle to ensure the customer is happy with the value placed on the vehicle.
How does agreed value work?
Hagerty exclusively calls this "Guaranteed Value." Hagerty will guarantee the dollar amount they would like their vehicle insured at the time of application. In the event of a total loss, that amount they set is the amount they receive.
How does coverage work when a vehicle is in transit: at a hotel or a repair shop, being transported, in Florida for the winter, etc.?
The simple answer to this question is your vehicle is covered for all of these scenarios. Transit coverage is an area where there is typically some confusion. Your vehicle is covered while it is being transported, and we also offer special policies for overseas transportation. And while one of our requirements is the vehicle be stored in a secure location, it will also be covered should you take it on an overnight pleasure trip, and it sits in the hotel parking lot.
What actions should owners take to ensure they'd be covered in case of a claim? Garage is always locked, disclose mods, mandatory anti-theft devices, etc?
The best way to ensure you will be covered in a claim is to be honest when applying. Also, any modifications during the time the vehicle is insured should be reported to your insurance company so there aren't any surprises during a claim.
We would not decline a claim just because the garage was unlocked; however, we encourage you to make sure you vehicle is safely stored. Hagerty does not require anti-theft devices, but it might provide the client some peace of mind to install them themselves.
What important coverage should a customer consider when applying for a policy?
When reading their policy, they should make sure the liability coverage meets their needs. They should also be sure to set the value for the vehicle at an amount they would be comfortable with if the car was involved in a total loss accident.
Break down the standard and optional coverage available with collector vehicle insurance.
The standard policy we offer here at Hagerty is a full coverage guaranteed value policy. What that means is that we can fully insure the appreciated value of the collector vehicle. If we insure it for a guaranteed value of $10,000, and it is determined to be a total loss, we write you a check for $10,000—we do not depreciate or argue with you on the value at the time of loss. Optional coverage we can offer is hobby related coverage, such as insuring spare parts for your vehicle, specialty tools, Automobilia, as well as coverage for your vehicle while it is being restored.
How are premiums determined?
The method for determining premiums varies for each state. Some of the factors that determine the premium are:
- Age of the vehicle
- Value of the vehicle
- Construction type (stock, modified, truck, motorcycle, etc.)
- Age of the driver
- Number of vehicles insured
How is a collector car insurance claim handled, step-by-step?
Here at Hagerty, the claims process is quite simple:
The insured contacts us to inform of a loss or damage
One of our claims representatives goes over the nature and detail of the loss with the insured
An appraiser is dispatched to inspect the vehicle and estimate the dollar amount of damage to the vehicle, and determine if the damages are significant enough that the vehicle is totaled
Our claims representative contacts the insured and informs them of the appraiser's findings
Once agreed on the claim, the policy holder will receive a check for the total claim amount
What can the owner do to ensure that a claim goes smoothly?
While it is tempting to dial Hagerty immediately after an accident, there is little difference if you contact us as it happens, or 24 hours later. Your first priority is making sure you and anyone else involved is safe. Be sure to take as many photos as reasonably possible and be prepared to provide any documentation, such as police reports.
Do you have any advice for a person in need of filing a claim?
Be honest in describing the situation, and be ready to share any photos or documentation. Also, asking questions is welcome—we are happy to help you with making sure you know what is happening, and what next steps will be taken. Don't worry about who is at fault, or about trying to get money from the other person's insurance company. The job of your insurance company is to take care of you, and your company will then decide whether to subrogate against the other person (or their insurance company) depending on who is at fault.
What should the owner NOT do to ensure a claim goes smoothly?
Never lie or misrepresent the facts during a claims process. When people lie they are at risk of committing insurance fraud, which is a federal offense. Remember, the job of your insurance company is to represent you, and make you whole after experiencing a claim.
What makes your company's coverage a great choice for potential buyers, and why?
Hagerty differentiates itself in many ways: while our premiums are lower than the standard market, we also offer these services as supplements to our insurance policies:
Claims expertise—all of our claims are handled in-house, and our claims representatives only deal with collector vehicles
The Hagerty Plus Roadside assistance program (covers flatbed tow trucks, and roadside assistance including jump starts, lockout assistance, and fuel delivery)
Hagerty produces Hagerty Classic Car Magazine—the largest circulated classic car magazine
By joining Hagerty, you are a part of our efforts to give back to the industry. Hagerty's Youth Programs are aimed at keeping young people involved in the classic car hobby, the Collectors Foundation provides funding for classic car education programs, and Hagerty founded and continues to support the Historic Vehicle Association.