Valuation of Classic Cars for Insurance

Seasoned owners of classic cars know that having the right insurance product for your car is very important. For most they will only learn this important fact when they have something bad happen to their prized classic car and they have issues with their insurance provider. Most of the time this is too late. The damage has been done, your classic car is looking quite sad and the insurance company that you trusted decided to not approve your claim. This is a nightmare scenario that no classic car owner should have to deal with.

Insurance needs for your classic car are very different to those of your normal car. The Insurance Institute of Highway Safety (IIHS) has one remarked that the insurance needs of a classic car or antique car are more akin to the insurance needs of a priceless piece of art rather than a consumer good. This statement in itself reflects on the complexity and the requirements of classic cars over normal cars.

One of the most important factors of the insurance needs of classic car is the valuation model used. The way a classic car is valued is significantly different from the way a normal consumer car is valued. Normal consumer cars are valued according to something called “market value” meaning that once a claim is entered, the adjuster will look at the market and give you a “fair” average of how much your car is worth based on what the market says. This valuation method simply can’t be used for classic cars. If a classic car is valued according to its average market value then the adjuster will also take into account the clunkers being driven around, the huge number of your classic car models in the junk yards and everything else that can no way be even associated with your car even though they share the same model number.

The only valuation method that is valid for classic cars is what is termed as “agreed value”. This is where you make an arrangement with the insurer that will guarantee the recovery of the full value of your classic car should there be a “write-off” of the vehicle. The insurer based on this agreement must issue a payment for a claim amount that corresponds exactly to the “agreed value” stated on the policy. This type of valuation is completely independent of the market and is a contract between you and the insurer for your specific classic car. There is no other way to value a classic car and receive due compensation if you “write-off” the car completely.

Here is the thing, most owners of classic cars will spare no expense at keeping their beautiful cars in the top condition that they want. The problem come when they actually want to value it themselves and actually put a price to their loved possession. The value to most owners goes further than just dollars and cents. There is a very strong intrinsic, emotional and even obsessive value to the classic car to the owners. It is quite normal for owner to find it extremely hard to value their own cars. This is why the services of a car valuation company might be necessary. You can find them through such clubs like the RAC or even by auction houses who can also provide this service. This way, professionals can come have a look at your car and see how much it should actually be worth. Some owners will have trouble trying to swallow the price but it is an independent view that they should consider. Since the valuation model used should be “agreed value” the owner can choose whatever amount that they see fit.

Although having an “agreed value” classic car insurance policy is the way to start it certainly isn’t the only thing that you should do. As mentioned earlier insuring a classic car is like insuring a family heirloom or an antique. The requirements of the insurance are much more complex compared to just a normal consumer car. For most owners the best thing to do is to consult with an insurance agent who has had experience in this field. This way they can offer you advice on what is the best way to proceed.