The unique coverages for collector cars
July 8, 2021 by Canadian Underwriter
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When people typically think of collector cars, they may immediately think of something like a 1970 Dodge Challenger, a Classic Corvette, and other cars of that vintage.
But collector cars also include exotics — think of something from Lamborghini — and some cars that may never see a paved surface, such as a race car from a bygone era that isn’t street legal.
No matter what the use, these vehicles fall under the collector car bucket and have their specific insurance needs, said James Reid, lifestyle product development manager at Aviva Canada.
“The definition of ‘collector cars’ is far broader than people assume it is,” he said. “A lot of people would imagine a collector car to be the standard ’67 Ford Mustang that someone has in their garage; that sits there and is brought out for special occasions, and perhaps isn’t used an awful lot in actual on-road use.”
In its collector car insurance program with partner Hagerty Canada, Aviva insures vehicles between 20 and 70 years old that many would consider to be typical collector cars. Then there are the modern classic cars: They might be newer, but rarer vehicles that might have had a limited production run; or, they may have developed a following among afficionados due to a unique design, which makes them a collectible item.
“That stretches all the way into the exotic category,” Reid said. “Think of your Ferraris and your Bugattis — your high-performance supercars that…are used very little. It’s a far broader landscape than I think people get the idea of the collector car being.” While some may view collector cars as being a very set kind of niche, “it’s far more expansive than that,” Reid added.
Although certain types of vehicles won’t be covered, the collector car program underwritten by Hagerty takes into account the actual use and annual mileage of the car, as well as how the insured takes care of the vehicle. There is less emphasis on the make and model of the vehicle itself.
That makes such a policy less expensive a typical auto policy. It helps the broker get the conversation started with their client, Reid pointed out. “It’s a tailored solution.”
One enticing endorsement for some classic car owners is what Hagerty calls “Cherished Salvage.” For a small additional premium, policyholders can choose to retain the vehicle in the event of a total loss and still get paid for the full insured value. Hagerty calls it “Guaranteed Value.”
“Normally the salvage, or what’s left of the vehicle, is sold at auction or taken out of the insured’s hands,” Reid explained. “Because of the nature of these vehicles, and the fact that we understand a lot of our customers have built these vehicles themselves, they have the mechanical understanding of what needs to happen. These are people’s projects in their lives.”
So in case something happens to their prized possession, the owner can keep the vehicle and perhaps try to restore it. “A lot of these vehicles might not be worth an awful lot in terms of monetary value after a loss, but in terms of people’s sentimental approach, it’s priceless.”
Other value-adds are available to those who have larger collections, or for those clients who have a vehicle beyond a certain price point for which brokers can assist clients in purchasing. These are handled on a case-by-case basis.
“There are various options available to them at that point that are not available on the average book,” Reid said. “If they meet the eligibility, they’ll automatically be granted extra coverages.”
He pointed out that coverages are always changing, and the product is continually evolving in Canada so brokers always have new products to provide clients.
Feature image courtesy of iStock.ca/skodonnell
Whenever I read of collectable cars, I am reminded, disappointingly, of a situation involving my wife’s ’60’s era Chrysler car. It was a gift from her dad shortly after we married as he was no longer able to drive. Some years later after parking the car at the curb of our house so I could have room to work in the garage, and as soon as I shut the driver’s door, a bunch of rusted metal fell to the pavement. I told my wife it wasn’t safe to drive and arranged to have the vehicle taken to a restoration shop that was somewhat known by a friend who had a broad knowledge of cars.
Throughout the process of repair and/or replacement by the shop, payments were made as demanded by the work. One of these included a $3,000 charge for 4 fenders ‘purchased from a dealer in Ohio who dealt in ‘new, but old, Chrysler parts.’
The work was completed after about 8 months and a total of $23,000 later; $19,000 for the body work and $4,000 for a motor job, as by this time the car was burning oil and there were some engine issues. The car was waiting for us outside the shop on the bright sunny day we picked it up. I didn’t realize until a few days later that the front left wheel well metal trim was missing. The shop claimed it wasn’t there when we took the vehicle in. We later learned that a vehicle similar to my wife’s was in the shop at the same time and we figured that’s where the trim wound up. We had to travel to the the east side of Lake Simcoe, to a recognized Mopar dealer of older parts, for the trim replacement.
It wasn’t until sometime later that when my wife went to sell the vehicle, it was determined that all four fenders were not new but repaired with body filler. The same applied to rust that developed around the doors. The professional appraiser had to tell us that in fact, body filler was used in most places where rust had developed. We were about to take some legal action against the shop but by that time, they had gone out of business.
From what we were able to subsequently learn, the owners had apparently branched out into the something of a Concours d’Elegance business, showcasing classic vehicles for competition in California and Vegas. Whenever we somewhat reluctantly watch these shows, we have to wonder what part of our $23,000 forms a new area of, say, a 1938 Bugatti.
But the lesson learned here is that when it comes to collectable car repairs, do a lot of careful research. You’ll save yourself some heartache and dollars.