The unique coverages for collector cars

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