Art on wheels
Binge-watching. I think it’s safe to say this is one trend that’s here to stay. And it seems like there’s something for everyone—even the collector car fan. Just last week, I heard two colleagues talking about the countless hours they spent in January watching the Barrett Jackson auction, Jay Leno’s Garage and Comedians in Cars Getting Coffee. With the collector car auction season moving into full swing starting with the Scottsdale auctions, there will be a lot of collector car entertainment to come this year. If you’re an owner or observer (in my experience, observing can turn to owning before you know it) in the collector car arena, there are important considerations for protecting a collector car—which might not make the TV episode but can prove to be immensely helpful just the same.
Protecting art on wheels
To classic car aficionados, a 1962 Ferrari 250 GTO is a work of art just like an original Picasso is for a fine art collector. And insuring a great classic car properly is just as important; especially to the owner. Like the sophisticated art market, the best choice for insuring your classic and collectible vehicles is usually an insurance provider who focuses on this special type of insurance.
Coverage is NOT all the same!
Most insurance providers offering personal auto coverage will also insure collector vehicles. The key is knowing what kind of physical damage coverage is provided by the policy. As vehicles age, they typically depreciate in value. The reverse is true of most true collector vehicles. This is one reason why you may not want to insure your pride and joy collector vehicle on a standard auto policy. You will most likely pay more in premiums and you may not get the coverage you truly need.
Standard auto policies are generally designed for the normal, daily-driven vehicle. They could include “Actual Cash Value” (ACV) physical damage coverage, in which the value after a covered total loss is based in part on “Blue Book” value such as that published by Kelley Blue Book or shown in other standard auto value guides. This type of coverage does not recognize that some vehicles may appreciate in value.
Some companies insure collector vehicles using a form of “stated value” coverage, which could state the amount to be paid after a covered total loss is actually the lesser of the “stated value” or the “Actual Cash Value.” This coverage simply puts a ceiling on the amount payable for a covered total loss, but could pay less than the stated amount if the ACV is lower.
A better option when covering your collector vehicle is a policy using a form of “Agreed Amount” coverage. This type of coverage provides a guaranteed payout of the amount shown on the policy (minus the deductible, if applicable) in the event of a covered total loss. Carriers offering this coverage set an “Agreed Amount” at the time the policy is written, and agree to adjust that amount over time (down or up) as the vehicle value changes or the owner invests more in the vehicle. Moreover, carriers offering such “Agreed Amount” coverage for collector vehicles often utilize a rate structure which takes into account different uses of collector vehicles—for example, the fact that a hobby car owner treats his vehicle as a piece of art to be collected and does not drive it every day or use it to commute to work. The standard auto carriers may not have such rate structures, so a specialty insurance provider might be able to offer lower premiums for collector vehicles.
Year, make, model AND…insurance provider
In the same way you are selective about the type of collector car you own, so should you be about the company insuring it. The Berkley One Classics Insurance program specializes in insuring collector vehicles using Agreed Amount physical damage coverage. We work cooperatively with vehicle owners to set the value when the coverage is written. Our program has been available since 1974, and we have a dedicated and experienced team of collector vehicle insurance specialists handling this coverage. They are your partner in helping to protect collector cars. They share a passion and an investment in collector vehicles—which means they, too, may have also seen the latest episode of Chasing Classic Cars.
Kathy Moore-Stark, AIS, CIC, CPIW is an Underwriter and Marketing Specialist at Berkley One Classics.
Berkley One Classics is an insurance program designed to focus specifically on the needs of collector vehicle owners. Berkley One Classics is part of Berkley One, a Berkley Company.
Editors’ Note: This post was originally published Feb 1, 2018 and was updated July 15, 2020.