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Collector Vehicle Insurance
What Every Classic Car Owner Should Know
By Jill Bookman
Just as a '65 Shelby Mustang is not the same as an "old
Ford," collector vehicle insurance is not the same as the insurance
you buy for your regularly driven, "everyday" cars. Collector
vehicle insurance can differ significantly from standard auto
insurance in terms of availability, coverage and cost, and it pays
the collector (sometimes literally) to know the difference. |
First, let's discuss availability. Collector
vehicle insurance is available on a national basis, and you can
purchase it from a specialty provider either directly or through
your independent insurance agent.
Collector vehicle insurance is generally NOT available to
individuals with vehicles that are less than 15 years old (vehicles
must be at least 25 years old in Massachusetts). You should also
have a decent driving record, at least 10 years driving experience,
other vehicles for "regular" use, and garage space for your
collector vehicle when it's not in use.
Now let's talk coverage. Standard auto insurers provide one of two
types of physical damage coverage (insurance for the car): "ACV," or
"Actual Cash Value" coverage is the most typical, and is defined as
"replacement cost minus depreciation." Obviously this is not a good
option for car collectors, as appreciating collector car values are
not recognized.
The second type of physical damage coverage is "Stated Value," which
obligates the insurer to pay "up to" the stated amount of vehicle
value. Note that "up to" does not guarantee the vehicle's full
insured value. Also note that standard auto insurers typically offer
$250, $500 and $1000 deductible options.
Here's where having a collector vehicle policy really pays. In most
states (with the exception of MA, TX & VA), specialty insurance
providers are able to offer "Agreed Value" coverage, which
guarantees the full insured value of the collector vehicle. In other
words, you and the insurer agree up front on the value of the
vehicle, and this amount is written on the declarations page of your
policy. In the event of total loss, the company is on the hook for
the agreed amount - period. What's more, most specialty providers
offer this coverage on non-modified ("stock") vehicles with $0
(Zero) deductible.
Finally, there's cost to consider. Believe it or not, you can buy
Agreed Value coverage from specialty providers for generally LESS
THAN what it typically costs to buy ACV or Stated Amount coverage
through a standard auto insurer.
Collector insurance rates are typically so low because specialty
providers place certain usage restrictions on insured vehicles, thus
limiting the insurer's risk of loss. The restrictions generally
include: limited pleasure driving & hobby use only (no daily
driving, commuting to work, running errands, etc.), no commercial
use, and vehicle must be garage-kept.
If you can live with the usage restrictions, a collector vehicle
policy can truly bring peace of mind and save significant dollars,
too.
For a free, online quote, visit
http://www.AmericanCollectors.com or call (800) 360-2277.
Jill Bookman is a licensed PA insurance agent and the VP of Sales &
Marketing for American Collectors Insurance. Online quotes are
available from American Collectors at
http://www.AmericanCollectors.com.
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