Classic Car Insurance Policies and the Differences

As an insurance agent in Texas, and considering my love for classics, I have spent significant time learning the differences between all the classic car insurance policies and what sets them apart from each other. I hear a lot of accurate and inaccurate statements made about classic car insurance. So I will try to address some of those in this blog. The most important thing to understand is Stated Value versus Agreed Value. This is a very critical piece of information when it comes to classic car insurance policies.

There are a handful of good Classic car insurance companies writing agreed value policies including American Modern, Hagerty, Chubs, etc. Most of the big names are partnered with bigger players, for instance: Progressive sells Hagerty and Geico sells American Modern. So you are dealing with Progressive but it’s actually a Hagerty policy. Now, agreed value policy is just the beginning. Each of these insurers have different limitations and different options. I’m going to pick on 3 for now just for examples.

• Hagerty is one of the leaders in classic car insurance policies and offer a lot of really good options like spare parts coverage and specialty tool coverage; however, they tend to be the most restrictive. Despite the fact that they say unlimited miles, they are strict about where those miles are going. For example, if you drive to a mall and the car gets stolen, they may not actually cover that. If they do pay out, you run a risk of getting dropped as they feel going to a mall is a daily driver type activity and not a “pleasure drive”. Going to get dinner on the other hand is not typically an issue. The bottom line is; they do not want the car driven as a daily driver or to big “box” stores. Also, Hagerty is very strict about off road vehicles. If your off-road vehicle has tires larger than 35″ then is’ essentially a guaranteed denial. Anything below that is subjective to the underwriter’s approval.
• American Mod is not as strict as Hagerty with how and where you can drive the vehicle but they do not have as many optional coverages. It’s a nice middle of the road type of policy. Less restrictive, less options.
• Safeco is the third I will use as example. Their policy is the least restrictive one I have seen. They basically have a regular auto policy using agreed value as the set amount. This means you have almost no restrictions on when and where you drive the vehicle but you also have none of the additional coverages that the others do like spare parts, tools, memorabilia etc.

Hagerty is owned and employs classic car enthusiasts. They know classic cars and therefore can provide some of the best service and the best knowledge on value. Safeco on the other hand, does not. I recently had an issue with a policy I sold where Safeco didn’t think the car was worth the value we were asking for. Hagerty and American Mod on the other hand easily agreed with the value. After all was said and done, I discussed this with Safeco and proved the value to them. In this case, it really helped to have an agent that understood classics working with the carriers.

When I talk to my customers about classic cars, I really try to understand what they are doing with their cars. If they have a car that they only take to shows and have lots of memorabilia etc, I will steer them to Hagerty. On the exact opposite, if they are like you and I and drive their cars as often as possible, I will work to write them with American Mod or Safeco. So it pays to really consider how the car is being used.

This is not black and white. You will hear stories where person 1 gets insurance from one carrier for x amount of money and x amount of coverage. Person 2 feels he has the exact same car and tries to get the same insurance and is quoted a much higher amount or may even get denied. Not all classic car insurance policies are the same and not all customers are the same.

In my opinion, it’s crucial to find an agent that understands what you need. There are a lot of agents out there that are very educated on Home and Auto insurance but don’t understand classics. They will sell you a policy but may not truly know what they are selling.

As you can see, the differences in carriers is amount of coverage versus flexibility in use.  I’m sure there are more questions you may have so please feel free to reach out to me either by phone, email or ask here in the comments and I will answer as best I can.