Two Words: Agreed Value

Where did I put that renewal form?

Once a collector car is yours, whether you have it in your possession or it’s just yours on paper, you must have it insured in your name. But that doesn’t mean you should just add it to your standard auto policy. There are some big choices to be made, and you need to make sure you’re protecting your collectible the right way.

There are many of things to consider with an insurance policy, but it all comes down to one question: “What do I get paid if something happens?” A standard auto policy may be fine for your standard auto. But a collectible car is a different animal. Simply put, if you have a special car that is appreciating in value, you need a special policy. There are two words to remember here: Agreed Value. With an Agreed Value policy, you and your agent have agreed upon the car’s total value before the policy is issued, so any questions are answered in advance. You’ll receive the full amount for which you have insured your vehicle if there’s a covered total loss, with no depreciation. (If the car increases or decreases in value, the Agreed Value can be adjusted.)

The fact is, collector cars are not used like daily drivers. They aren’t left in parking lots all day or used for running the kids to soccer practice on a regular basis. Since they are used in a limited way, they are less of a risk for the insurer. That means you can get better coverage at a lower price.

Approach insurance like you would any other resource for your collector car. Would you build a garage with a door that doesn’t shut? Then don’t get an insurance policy that leaves the door open. Take some time to educate yourself. Ask questions when you call for a quote. How can you use your car? Will the value be depreciated? Ask around for references. Do you know someone that’s had a claim? What was his experience like? When you have a collector car policy, you’ll get specialty service from people who understand collector cars. Then, you’ll be able to relax and enjoy your car without worrying about everything that could happen to it.