Revving up coverage for collector car clients.
Opportunities abound for agents hoping to gain new business or retain customers. There are resources available to help the novice agent who knows little about collector car coverages and wants to provide better service to his clients, those who know a little and want to learn more and those who have collector car clients and don't want to lose them.
PASSION IS THE DRIVING FORCE
Agents and brokers who regularly work with collector car enthusiasts know what drives these clients: passion. To own a collector vehicle is often the realization of a lifelong dream and an important part of the owner's life. It's more than an investment for most. And despite a slow economy, the collector car market remains relatively stable, even growing in some areas, which is good for agents looking for new business.
Baby boomers, those born from 1946 to 1964, are helping fuel collector car purchases, because they often want to own automobiles from their teenage years. Online networking also is helping drive the market through cyber car communities and blogs.
The collector car market is as diverse as the automobiles that make up the market. There are vintage vehicles, muscle cars, sports and exotic automobiles, and classic cars. And the definitions behind the categories are often fluid and disputed among the experts. But there are basic guidelines.
According to www.MuscleClubCar.com, a muscle car is an intermediate-sized, performance-oriented model, powered by a large V8 engine, at an affordable price. The Classic Car Club of America recognizes classic cars as autos that were built between 1919 and 1948, limited in production and quite expensive when new. Vintage vehicles include cars made from 1916 to 1924, when transportation became more reliable thanks to improvements such as the development of the electric self-starter and increased safety and driving features.
For information on sports and exotic cars, visit www.sportscarmarket.com, a one-stop resource for insider's information on collecting, investing, values and trends in the collector car market.
Agents and brokers also need to become knowledgeable about auctions which take place throughout the year for collector car owners. For example, Monterey Auto Week is one of the largest and most prestigious collector car events. Held each August on the Monterey Peninsula in California, the event has hosted some of the top sales of the year. This year's total sales, according to the LA Times, were a respectable $116 million, down from last year's figure of $130 million. Even in a down economy, sales were strong.
However, most entry-level collector cars begin between $25,000 and $50,000.
COVERAGE OPTIONS FOR COLLECTOR CARS
When it comes to the collector car market, variety is the norm and the phrase "beauty is in the eye of the beholder" rings true. The definition of "collector car" often varies. However, for insurance purposes, to be considered a collector car, it doesn't necessarily have to be old, it just has to be appreciating or maintaining its value. Thus, some new vehicles fit into the collector car insurance market
A new owner of a collector car might make the mistake of purchasing a standard auto policy for the vehicle. Instead, agents and brokers should advise their clients to purchase a collector car policy. Because these cars are often used for pleasure or hobby use, carriers are able to offer lower premiums.
However, collector car owners usually require other coverages and services not in standard auto policies, so agents need to talk with their carrier about the following:
1 Agreed value coverage that increases with the value of the car. The value of a car is determined at the time a policy is purchased, so if the vehicle suffers a covered total loss, there's no haggling over value. Furthermore, with proper notice, a policyholder can increase coverage of the vehicle to proper market value anytime prior to a covered loss.
2 Choice of body shop. This is often a must-have feature to any collector auto. Owners want to be able to choose the facility that will repair the car after a covered loss, since they need mechanics who can work on their unique automobile. Also, insurers should be able to offer referrals to top renovation specialists and parts dealers when needed.
3 No mileage restrictions. Many owners are very involved in collector car activities, exhibits and parades, so not restricting mileage becomes very important. Some owners also travel on tours that are 3,000 miles long, so look for policies that do not limit mileage for hobby use.
4 Coverage for newly acquired autos worldwide. Many collectors travel internationally with their cars. On those trips, another vehicle can be purchased. A policy that automatically extends to any new collector cars bought anywhere in the world for 30 days from the date of purchase is needed for these particular owners.
5 High limits for comprehensive, collision and liability. Whether the owner has one collector car or several, many need high limits for these coverages. Some carriers can also offer liability limits that go up to $50 million.
6 Off-premise coverage. This provides coverage for fire, explosion and many other perils while the car is in the repair shop.
6 Fair replacement of parts. On collector cars, all parts are not created equal. To maintain a vehicle's value and authenticity, many owners have the restoration shop seek out elusive parts to replace damaged ones due to a covered loss. Depending upon the vehicle, some parts are no longer available and must be handmade to original specifications. In the end, the owner wants the vehicle restored to pre-accident condition and authenticity, so having this type of coverage available is vital to collector car enthusiasts.
Other coverages include no deductible, towing the vehicle to the insured's shop of choice after a covered loss while using the client's desired transport (tow truck or flat bed) and also providing safety and security inspections of garages and storage facilities to maximize safety and minimize exposures to theft and other losses.
One last consideration is for agents and brokers to know who is behind the collector car policy. Does the carrier understand the complexities of the collector car market? What is the responsiveness of the carrier to pay claims in the unfortunate event of a covered loss? Does the insurer have the financial resources to pay? Research the carrier to make sure you have the important information you need to help satisfy the customer and mitigate the risks in the event of a covered loss.
Investors, enthusiasts, collectors, dealers and hobbyists all play a vital part in the collector car market. Agents and brokers can become more confident by staying informed on industry trends, by looking at the histories behind the cars, and by attending auto shows and auctions to learn more. Working with insurance carriers and knowing who is behind the policy is key, too. Agents and brokers can then be confident in their ability to help their clients secure proper coverages for their collector cars.
By PAUL MORRISSETTE, president, Chubb insurance solutions Agency Inc.
Paul Morrissette is the president of Chubb Insurance Solutions Agency Inc., a wholly owned subsidiary of The Chubb Corp. The full-service agency is staffed by licensed and trained insurance consultants who provide non-appointed agents and brokers the ability to obtain Chubb's personal insurance products and services for their key clients. He can be reached at firstname.lastname@example.org.
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|Title Annotation:||Getting Personal|
|Publication:||American Agent & Broker|
|Date:||Oct 1, 2009|
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