Do You Own an Antique, Classic or Collectible car? Why you need to insure it with a Specialty Auto Insurance policy?
There are several differences between purchasing a 'standard' auto policy and a 'specialty' auto policy for your beloved collectable car. The biggest difference lies in the way the car is valued after it's been declared a 'total loss' by the insurance carrier.
3 Methods to Calculate the Car Valuation After Declared a Total Loss
Actual Cash Value (ACV) - Depreciated Value
At the time of an insurance claim, a standard auto policy will value a car at 'depreciated' value. There are couple ways to calculate this, but in general it is: Original Cost New - (wear and tear, obsolescence)
*Standard auto policies a use the 'ACV' method to value a car if declared a total loss.
Agreed Value - Guaranteed Value
A Specialty policy will allow you to place a value on the car, up front when the policy is purchased and this replacement amount if stated on the policy. An 'Agreed Value' endorsement and will cost a little extra. But it's worth it because it acts as 'guaranteed' replacement value. This amount should be evaluated very couple years. If the car is appreciating you will need to increase this amount to get the full value of the car if declared a total loss.
Stated Value is similar to Agreed Value in that you place a 'stated value' on the car up front and this amount is listed on the policy. But within the policy language you might see this wording "In the event of theft or a total loss we will pay the Stated Value OR THE Actual Cash Value.......whichever is less. So it is possible you can pay extra to add the 'Stated Value endorsement...but end up with a lesser amount because this clause allowed the carrier to pay the 'lesser amount' of Stated Value shown on the policy or ACV.
In to order to make sure your claims payout truly reflects the value of the car, you should purchase a Specialty Car Insurance policy that allows the 'Agreed' Valuation of your car. This is the best way to insure you receive the true value of your car if it's totaled. No surprises...you get the amount of money you 'agreed' to when you purchased the policy.
Specialty Car Insurance Use Different Rating Factors to Determine Policy Cost
- Specialty cars can be a little tricky to repair. Replacement parts may be hard to find or even need to be custom made.
- Specialty cars may not have the safety features as cars made in modern factories.
- Specialty Cars are Usually Driven Less than Standard Cars
- Specialty cars are usually stored behind locked doors to preserve the cars value
Every carrier will calculate the cost of the policy differently. But in general, Specialty Car Insurance policies are cheaper than a standard auto insurance policy because the carriers know a Specialty car is driven less, usually stored in a locked structure and well cared for in order to retain and appreciate the car's value.
Specialty Car Insurance Optional Coverages Available
Specialty Car insurance policies might also offer optional coverage that might not be available on a standard auto policy
- Specialized Towing, Flatbed towing
- Coverage for Repair tools
- Coverage for Spare Parts
- Travel reimbursement expenses
At Denver West Insurance Brokers, we insure many Specialty cars and we work with several carriers to find a comprehensive Specialty Car Insurance policy for clients. Why don't you give a call?
We serve all of Colorado, Denver, Golden, Arvada, Lakewood, Littleton, Morrison, Evergreen and Mountain Region.