Classic Car Appraisal

[Johnny]

As most of you know I just completed restoring my 1960 AHBN7. Now in order to have the car insured I have to have an appraisal made to arrive at an "agreed on value." Most large insurers require this step. After having my car appraised I merely took the papers to my carrier and they insured the car, no problem. As a suggestion to all who are going to be going through this procedure I would recommend you take all your receipts and write up an outline indicating each step along the way showing date, who did the labor and the cost. The appraiser I used said had I done this he would of knocked off $50 from the cost of the appraisal. We poured over the receipts for at least an hour and half. Also furnish lots of photos showing the work done.

 

[JMC]

The Insurance Carrier I used for my recently restored 1958 BN6 did not require an appraisal. The only thing they required were a number of photos that I sent e-mail so that we could come to an agreed amount for the physical damage coverage. The Carrier is a national company with an A+ Best Rating.

 

[Dave Russell]

Hi John,
I originally insured my car for "agreed value" With ACI. They accepted a bill of sale in lieu of an appraisal.

When I went to raise the value by $10,000, they wanted all of the receipts for work & parts. I asked them if they really wanted a stack of 90 receipt copies or if a "Excel" spreadsheet summary would be ok. They readily accepted the spreadsheet & increased the value. I update the spreadsheet as parts or work is added. Sort of a rolling documentation for a rolling restoration.
D

 

[Ralphanator]

I have Allstate auto insurance! They told me to have a Classic Car Appraser Apprase my TR6 and they would insure the car on whatever the Appraisal came in at! The Appraiser came over checked out the car for 3/4 of a hour took a lot of notes and pictures!

I asked him if he wanted receipts and he said No! He used the NADA Book to arrive at a Value!It came in at High Retail!!

My insurance went up about $30 for 6 months to insure it for the High Retail!

 

[tahoe healey]

Try Hagarty Ins. They are highest rated. They only insure classic cars and planes. Best prices. Less than 200 per year for my BJ8. I did not need appraisal.

 

[vagt6]

Unless we purchase "stated amount physical damage" or similar coverage for our classic cars, we will get a depreciated claim settlement (i.e., the loss reimbursement is based upon the item's depreciated value, not the current market value) from the insurer.

Simply adding a classic/antique car to your existing automobile policy, with the same coverage as your late-model cars, won't provide adequate comprehensive (fire, theft, vandalism, windstorm, etc.) or collision (pays to repair damage to your car if the wreck is your fault) coverage. A depreciated insurance claim settlement for a classic or antique car is often a fraction of its market value.

Stated amount auto coverage is generally based upon an appraised value and most insurers charge rates per $100 or $1,000 coverage. For my GT6 I chose to purchase stated amount comprehensive coverage but not collision from my insurer. The appraisal cost $100.

In my 25+ years in insurance and risk management, I've seen plenty of folks get shortchanged by not purchasing proper coverage for unusually high-value items, including antique furniture, jewelry, collectibles, and classic autos. Don't get burned by this little detail in your coverage.

I hope this is helpful.

 

[Dave Russell]

In the special car insurance business There is a subtle but big difference between "stated value" and "agreed value".

"Agreed value" is agreed in advance, and in
case of a total loss, is the value that will be paid. No questions asked.

"Stated value" simply establishes the maximum value. They don't have to pay any higher, but they can pay lower if they can establish that the actual replacement value is less. (And they're the ones who decide.)
D

 

[Larry Campbell]

Johnny,

I will echo Tahoe Healey's comment, about a month ago I wanted to raise the agreed upon value by $10K, required a few pictures e-mailed to their web site, raised the premium from $172 to $225/yr. Painless and quick service from Hagerty.

 

[Dave Russell]

<blockquote><font size="1" face="Verdana, Arial">quote:</font><hr>Originally posted by vagt6:

In case of an insured loss, the insurer will pay for repairs up to that amount less any deductible. If it's a total loss, the insurer will pay $10,000.
<hr></blockquote>

I don't quite agree. See the following quotes from;
https://www.iiaba.net/VU/Lib/Ins/PL/Auto/FacultyAgreed.htm
D

"The Limit of Liability is the lesser of the stated amount on the Schedule or Declarations page, the ACV of the property, or the amount necessary to repair or replace the property with property of like kind and quality. There is also a provision for a reduction in payment due to betterment."
"In other words, since there's no scheduled limit on the ACV recovery under the unendorsed policy, the endorsement either has no effect or will REDUCE recovery...of course, the insured (and too often the agent) is under the mistaken impression that they have agreed value coverage."


"Under agreed value coverage, the insurer will either repair or replace the property or pay the amount shown in the Schedule or in the Declarations. In other words, there is no ACV calculation so, in the event of a total loss or if the repair cost exceeds the scheduled limit, that limit will be paid on an agreed basis."

 

[Healey 100]

I have had agreed value coverage for years. My carrier has accepted the value based on pictures and book values for similar cars. I understand if the value you want is on the high end of the spectrum, many carriers may ask for a third party to give an appraisal.

I don't understand what value restoration receipts add to the process. What you spent buying or restoring your car has no relation to its market value. I know many people who have spend thousands on professional restorations -- and the resulting car has far less value than that. Insurance does not cover what you paid for a car. It covers what it costs to replace the car.

My insurance carrier has never asked for receipts, and I would not give him any if asked.

 

[vagt6]

That's an excellent piece, thanks for posting it. If you can find such coverage, go for it.

But, I'm still a believer in the stated amount coverage and here's why: with most insurers, it's the best coverage they offer, it's not too expensive, and it's better than plain "ACV" (actual cash value, e.g., depreciated settlement) coverage.

Also, policy language varies from state to state. I'm not aware of any other state that has language such Tennessee's.

The moral to this story: be darn sure what you're paying for if you have a valuable car and need to insure it. Not all insurance agents are created equal and yours may not know the details!

Thanks to you all for the great input.

 

[Dave Russell]

<blockquote><font size="1" face="Verdana, Arial">quote:</font><hr>Originally posted by vagt6:
That's an excellent piece, thanks for posting it. If you can find such coverage, go for it.
<hr></blockquote>
I think that we are talking about two different types of car. Exotic, collector, antique, street rod - vs the average to nice driver, toy, commuter. There are a lot of driver cars that you wouldn't want to insure as a collector car with its accompanying driving restrictions. Then there are some that you have more in than you could sell for or worth a lot more than the insurance company thinks. This is where "agreed value" comes in.

Some further reading on the subject;
https://www.iiaba.net/VU/Lib/Ins/PL/Auto/FacultyStated.htm

Agreed value
In the event of a total loss on your vehicle, the insurance company will pay the full value as listed on your insurance policy. They can not depreciate off this value. Most companies that specialize in collector vehicles insure them on this basis.

Here are three companies that DO underwrite "agreed value" coverage;
https://www.americancollectorsins.com/
https://www.hagerty.com/
https://www.jctaylor.com/
D

 

[Dave Russell]

<blockquote><font size="1" face="Verdana, Arial">quote:</font><hr>Originally posted by Healey 100:

I don't understand what value restoration receipts add to the process. What you spent buying or restoring your car has no relation to its market value. I know many people who have spend thousands on professional restorations -- and the resulting car has far less value than that. Insurance does not cover what you paid for a car. It covers what it costs to replace the car.
<hr></blockquote>

What if I buy a classic car which is a bit run down but worth the asking price. Then I put $20,000 more into it bringing it back to showroom perfection? The only way to get increased coverage is to get a new appraisal or to show receipts covering the additional amount. Do you want the full replacement cost or the market value. Take your choice. Often the replacement cost is the same as the original plus improvements.

Especially on the more rare, old, desirable cars, even market value can be very high. I have seen Healeys going for $60,000 & Jags going for $120,000.
D

 

[Healey 100]

Dave:

My collector car insurer covers to "agreed value" but I do not believe they will agree to a value that exceeds the car's market value. If they did, you could insure your '62 Rambler for 100K and then have an engine fire.

On several occasions I have adjusted the agreed value for cars that are in the process of being restored. My company just asks for pictures to indicate that value has been added to the car. They have not asked for any receipts, though I suppose I could offer them to help make the case. I also raised the agreed value on my Healey one year based on the generally increasing value of Healeys. They didn't challenge that either, though I was not claiming a value anywhere near the top of typical values you see for Healeys these days.

 

[Dave Russell]

Yeah - I agree.
Some differences between the companies.
My company would insure up to $25000 with just pictures. To go above that they wanted a new appraisal or receipts to prove the higher value. They also automatically raise the value a few percent each year.
D

[ 11-14-2003: Message edited by: Dave Russell ]</p>

 

[vagt6]

Insurance policies often seem to be written by people who don't want us to understand the coverage. It can be very confusing.

"Stated amount" coverage is a univeral term in the insurance industry. It refers to physical damage (comprehensive and/or collison) coverage that's based upon a specific amount of insurance relative to the appraised value of the car.

With stated amount, coverage may be purchased, usually in $100 increments, up to the appraised or agreed value of the car. Thus, if the car is appraised at $10,000, we may purchase up to $10,000 coverage. In case of an insured loss, the insurer will pay for repairs up to that amount less any deductible. If it's a total loss, the insurer will pay $10,000.

That's what stated amount coverage is. If you're insurer doesn't require an appraisal, you probably don't have very good coverage.

 

[JMC]

Everyone has made some very valid points in these posts. However, my 40+ years in the Insurance underwriting business has taught me one thing -- always read your policy provisions. Many auto policies are different and all are regulated by the individual states. CA and TX are usually different than the rest of the country. My policy through Chubb is on an Agreed Value basis. In CT that provision reads:
"For a covered loss to a vehicle, we will pay as follows:
Total Loss. If the vehicle is stolen or totally destroyed, we will pay the amount stated in the declarations. Payment will be reduced by any amount for a previous loss to that vehicle if the damage was not repaired. A deductible will not apply to a total loss. A vehicle is considered stolen when the entire vehicle is stolen and not recovered within 30 days. A vehicle is considered totally destroyed when the salvage value, determined by the company, plus the amount of labor and parts of like kind an quality necessary to repair the vehicle, is equal to or greater than the amount shown in the declarations.
Partial Loss. If the vehicle is partially damaged, our limit of liability will be the lesser of the amount required to repair or replace it with labor and parts of like kind and quality, or the amount of coverage shown in the declarations."
My company (Chubb) accepted photos to come to the Agreed Value coverage.
Remember -- Read your Policy.

 

[Bugeye58]

Always read your policy is good advice in any situation.
My LBC's are insured based on agreed value, and when I have done something to increase the value, my agent has wanted to actually see the car. I really don't think this was necessary for insurance purposes, as on both occasions he has wanted to either get a ride in it, or drive it!
Maybe next time I can convince him to buy one of his own!

Jeff

 

[Johnny]

"The Limit of Liability is the lesser of the stated amount on the Schedule or Declarations page, the ACV of the property, or the amount necessary to repair or replace the property with property of like kind and quality. There is also a provision for a reduction in payment due to betterment."
"In other words, since there's no scheduled limit on the ACV recovery under the unendorsed policy, the endorsement either has no effect or will REDUCE recovery...of course, the insured (and too often the agent) is under the mistaken impression that they have agreed value coverage."


"Under agreed value coverage, the insurer will either repair or replace the property or pay the amount shown in the Schedule or in the Declarations. In other words, there is no ACV calculation so, in the event of a total loss or if the repair cost exceeds the scheduled limit, that limit will be paid on an agreed basis."[/QB][/QUOTE]
Many thanks to all who responded. I know I learned plenty. I will respond to the above by saying my American Family Insurance policy only costs $240 per year for Agreed on Value coverage. However, the "International Society of Appraisers" I used gave me this interesting story when I asked if this was all necessary. " I appraised a '65 mustang some years ago for $7000 (It was a coupe). The person wrecked the car and the insurance company wanted to depreciate the car and not pay the agreed on value of 7K. I was called in to appraise the damage, and found the car was totaled. However, since the car had appreciated to $9000, my new appraised value due to market increases, the insurer was paid $9000."
Sorry for the long post but I think this is very important. Receipts are only important when you do the work yourself. It determines market value in a difficult field. Just because you purchased a lot of parts, doesn't mean you put them on the car! It's important to have a certified appraiser.
IMHO.