Who Cares About Specialty Insurance?

When it comes to insurance, a primary concern of classic and collector car owners is how much their policy will pay out if they are involved in an accident and their car is a total loss. A big factor of the amount paid out depends on what type of coverage they have on their vehicle. There are a couple common types of policies your client will come across when they’re looking to protect their collector car, and choosing the right one could mean getting what their vehicle is worth—or not.

What’s the difference between specialty and everyday insurance?

Specialty and everyday insurance policies are quite different when it comes to vehicle valuation and how clients are compensated in the event of a loss. There are three ways auto insurance can pay out claims:

• Actual Cash Value: Most general auto insurers offer Actual Cash Value policies. Because most cars begin depreciating the moment they’re driven off the lot, standard insurance companies insure cars accordingly. They will adjust claims payouts based on what the car would be worth the day of the accident (prior to any damage occurring), instead of what the owner originally paid. That means, if your client's collector car is stolen or declared a total loss after an accident, and it’s on an Actual Cash Value policy, it’s unlikely they’ll be compensated for its true value.
• Stated Value: For collector vehicle owners, general auto insurers will often offer a Stated Value policy option. This type of coverage reflects an amount that is “stated” at the onset of the policy. The owner tells the insurer what their car is worth (with proper documentation), and it is insured for that amount. However, with Stated Value policies, the insurance company can choose to pay either the Stated Value or the Actual Cash Value—whichever is less. That means, your client could get less than the Stated Value, if the Actual Cash Value is lower at the time of the accident. And since these values are still based on the general market (as opposed to the collector car market), it’s not uncommon for the Actual Cash Value to be less.
• Guaranteed Value® by Hagerty (also known as Agreed Value): Most specialty insurers offer an Agreed Value policy, what Hagerty calls Guaranteed Value. With Guaranteed Value, you and your client help determine an accurate value up front and if there’s a covered total loss, that’s what your client is paid—not some depreciated estimate.* Guaranteed Value uses industry-leading data from Hagerty Valuation Tools®, not the used car market, to ensure that your client will be compensated for the true cost to repair or replace their collector vehicle.

Who needs specialty insurance?

It’s simple: If you have a client with a collector car, they need specialty insurance. And what qualifies as a collector car? Different companies have different vehicle and age requirements, but vehicles are generally considered “collectors” if they are not daily drivers; they maintain or appreciate in value; and/or are of limited production or special interest.

At Hagerty, we worry less about the year, make, and model than we do about how the car is used. Some of the cars we protect include:

• Modern collectibles from 1990 to today (think two-door sports cars and convertibles, up to the current year)
• Collectible supercars – Bugattis, Ferraris, Maseratis, and more
• Collectible trucks, Jeeps, vans, and SUVs that are from 1998 or older
• Modified vehicles like hot rods, replicas, race cars, lowriders, pro-street and tuners
• Retired military vehicles, commercial vehicles, and tractors, such as semis, Jeeps, tanks, and fire trucks

 What makes Hagerty the right choice when it comes to specialty coverage?

One of the biggest misconceptions among buyers is that the right auto insurance coverage is the option that’s the least expensive. But that’s not always the case, especially when it comes to collector and enthusiast vehicles.

Since 1984, Hagerty has been in the business of protecting the vehicles that people love. If you have a client who needs specialty coverage, there are many reasons to partner with Hagerty. Here are just a few: 

• Guaranteed Value coverage: It’s the only way to make sure your clients protect the full value of their collector vehicle.
• Member-centric: Hagerty is proud to be a company that clients really like working with. In fact, our NPS score is 89—far exceeding the industry average of X. That’s thanks to our customizable coverage, exceptional claims department, and the fact that we truly understand the collector car hobby—because we’re enthusiasts too.
• Financial stability: As an advisor, you want to recommend a company with an A.M. Best rating of “A-” or better—which Hagerty has. This rating gives clients peace of mind that the company is financially strong and benefits from good management.
• Freedom to drive: Your clients want flexibility when it comes to driving their collector vehicle, both how often and where. Some insurance companies limit coverage to car shows only or don’t cover a loss if the vehicle is somewhere like a grocery store parking lot. Hagerty believes cars are meant to be driven; as long as the car isn’t being used as a daily driver, we’re happy to see clients actually enjoying their vehicles. 
• An authentic love for cars: As a passion asset, your clients will appreciate an insurance company that has experience, expertise, and passion when it comes to collector vehicles.

Get more agent insights from Hagerty to grow your business through the collector car market.