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This week’s podcast show guest of Jonathan Klinger from Hagerty Insurance. For a lot of us, car insurance is one of those necessary evils we must deal with in life. We know that we need it, we know that it’s important, but for the most part we realize that dollars spent on insurance premiums are ones that we’ll never see again unless something really bad like an accident, theft, fire, or the neighbor kid’s baseball ends up causing harm to our ride. Since most of the muscle cars we all know and love qualify for antique auto status, the type of insurance that we require is truly dependant upon the amount of coverage we desire and the use of the car. Will it be a daily driver, or just an occasional fun-mobile? Will it spend time on the race track? Have we put $50,000 worth of Pro-Touring speed parts into that in no way conform to “blue book value?”
For the most part, the type of insurance that a majority of classic muscle car owners will use is called “agreed value” insurance, especially if you have a high dollar car. This is a type of policy where you and the insurance company agree on an amount of coverage value for your car (say $40,000), and you pay a monthly premium on that. Companies like Hagerty have been issuing these policies for years, and the premiums are far lower than those of traditional car insurance for a car of the same value. It’s a great way to get your car covered for a high dollar amount at a low price. If you have your car insured with them for $40,000 and it’s stolen you’ll receive a check from Hagerty for $40,000. It’s that simple. What’s the catch? Usage. Most companies that issue “agreed value” policies do so with the provision that you are insuring a specialty car that is NOT to be used as daily transportation (i.e. the car you drive to work). They also stipulate that your specialty car be kept in a garage when not in use. One huge plus though is that there are absolutely no requirements on limiting annual mileage and an appraisal of the car is almost never necessary.
What if you’d like to use your car more frequently, or as a daily driver? In that case, “stated value” insurance is the way to go. This is essentially just like regular car insurance, so you’re covered in every situation, but with a value stated on the policy for the car’s value and coverage amount. This differs from agreed value insurance in that an appraisal of the car is usually required and you’d need to find an insurance company to work with. State Farm and Allstate offer these style of policies (along with many others). It will NOT be as cheap as the agreed value policies, but it will provide you the coverage that you’re looking for. Keep in mind that in the event of an accident or full total of the car your insurance company would still do a market analysis and try to find the current market value of the car, regardless of the State Value amount.
Jonathan did a terrific job of walking me through all of the scenarios, and did make a point to note that while most policies don’t cover cars on the race track (including Hagerty), some specialty policies are available. They too have a catch though as the race event must be cleared with the insurance company upfront, which is not a simple, or easy task. Jonathan didn’t give me an idea on what that type of policy might cost, and I didn’t ask! For the most part, if you plan to drag race or autocross your car just know that you are not covered during the act of racing itself, but you are eeverywhere else.
One last thing about Jonathan that you’ll be impressed by is that his daily driver is a 1930 Ford Model A. He’s on a run to drive his A every day for a year. You can follow his exploits at 365daysofa.com. I did ask if he uses a Hagerty policy on his Model A, and he admitted that since it’s his daily driver he could not do so, so he’s got a standard auto insurance policy on it and he’s just hoping that nothing bad happens. I’ll give him this; he’s honest!