Your coverage does not mean what you think it does. Here are some definitions. They are as international as the insurance industry is.
ACTUAL CASH VALUE: This is normal insurance. If you have this coverage, you'll get somewhere between wholesale and retail blue book in the event of a total loss.
STATED VALUE: This is the classic 3-card Monty of the insurance world. Pays either the stated value, or actual cash value, whichever is LOWER. Have to be careful here, because you may pay a premium for the higher value you think it's worth, but still get only actual cash value in terms of a total loss. On total loss, it is WORSE than actual cash value because you might unwittingly set a value lower than what they would have paid without it. They will NEVER pay you more because of it, only less.
AGREED VALUE The ultimate for a classic or collector car. Initially based on the INSURER'S detailed appraisal of your car, then the "agreed value" is the sum you'll receive in the event of a total loss.....no research, no questions, no arguments. Needs to be updated every three years. Your premium will be adjusted to reflect that potential loss. Note that if you enhance the value significantly with restoration or whatever you should report that fact to the insurance company. In most cases it won't increase the premium, but it will ensure you're compensated for it in the event of a total loss.
DETERMINING VALUE: How do you and the insurance company determine the value of your car? You can hire an appraiser, some classic car insurance companies don't think it's necessary but I do. If you have a stock original vehicle (one to which you haven't done any work or added anything), there are many resource guides and pricing books. Beware, these don't work well for Morgans.
If you've made improvements or additions to the car that you believe increase its value, you MUST hire an appraiser to support your claim and the best one to hire is a Morgan Dealer. Owners restoring cars should keep detailed lists of the work performed and receipts for all parts and labour. Some companies will require appraisals at the owner's expense to establish the agreed value, while others may not. Get a paid for third party appraisal regardless. Redo the appraisal after any major work or improvement or upon the advice of the appraiser.
A few companies offers it calls an "inflation guard," which automatically increases the vehicle's value by 2 percent each quarter, up to 8 percent each year, at no extra cost. If, however, your policy doesn't have automatic increases, you should review your policy and your car's value on an annual basis to be sure you have enough coverage
QUALIFICATIONS: Both you and your car may have to meet certain qualifications to buy this type of insurance. Driver record and age, car storage facilities, alternate vehicles for "everyday" driving might be required. These factors will vary from insurer to insurer
Coverage and costs are better and your portion of any accident can be negligible. Yet, classic car insurance is much less expensive than standard car insurance because of the restrictions. The liability portion of your vintage auto policy may cost less than $100 per year incident and the deductible or your contribution to any incident will be minimal.. That's because your insurer knows you won't be driving the car very much and, when you do, you'll be driving it very carefully.
Normally defined when the cost of repairs exceeds 65% of insurer's valuation of the vehicle after the accident. (Morgans are not "too far gone" when they require only 65% of their lowest possible value to repair.)
The insurance company will force you to scrap the car if the damages are more than 65% of the wholesale value. Some policies may allow you to keep the damaged car. However the insurers will report it to the government as severely accidented and unroadworthy and require you to surrender the registration plates prior to their payment. With the loss of the original chassis number, the authenticity of the car becomes suspect to buyers and a large portion of its resale value is gone.
This problem can be negotiated if you are aware of it. See eMog for further help.
Car Insurance Basics
by Mark Martin
The motoring world is currently in the middle of an international
crisis. Oil prices are continuing to spiral out of control and the financial
markets are still recovering from the global recession which has seen increases
in car insurance costs across the board. The AA has recently reported that
the average driver in the UK has experienced price increases of at least
40% on their car insurance, with similar patterns being reported in most
Classic Car Insurance may well be cheaper than insurance for conventional vehicles, but this doesnít mean that Morgan owners are unaffected from the changing market with further price hikes rumoured to be on the cards for this year. Indeed, Moneysupermarket.com recently estimated that car insurance prices are currently increasing by 44 pence per day. So what can you do to make sure that you are not forced to give up your Morgan?
Shop around and Haggle
In order to ensure that you get the best deal possible, you should compare offers from as many different insurers as possible. The easiest way of doing this is through comparison websites, as they will compare deals with hundreds of different insurers instantaneously. This will not only save you time but also increase your chances of finding the right deal.
However, donít just accept the cheapest deal as they may omit basic insurance elements to achieve this price, such as authentic replacement parts guarantees. If your car is damaged and replacement parts are fitted which are not authentic, it could have a devastating effect on the overall value of your vehicle. Therefore, if you see a slightly more expensive insurer who, unlike a cheaper rival is guaranteeing to fit authentic replacement parts, feel free to phone them up and tell them about cheaper offers you have received elsewhere. More often than not they will offer to cut the price of your premium in order to avoid losing your custom.
Mileage and Security
Insurance firms calculate premiums based on statistics, and the more likely you are to make a claim the more they will expect you to pay. This is basically why classic car owners pay less than owners of conventional vehicles, because insurers know that a classic car owner will look after their car.
Another statistic used by insurers is the number of miles you are planning on travelling over the course of the year. A driver doing 10,000 miles is obviously more likely to have an accident than someone who does just 2,000. Therefore, when your insurer asks how many miles you are planning on travelling over the duration of the policy do make sure that you do not tell them more miles than what you will actually be travelling, as you will be wasting money. Equally, donít request a mileage allocation which you know you are going to exceed as this will render your policy void and result in your insurer refusing to pay out in the event of a claim. It is a difficult balancing act.
Insurers will also look at where you car is parked during the day and at night when calculating the cost of your insurance. Obviously, a car parked in a garage is far less likely to be stolen or vandalised than one parked on the road and the insurance paid will reflect this. This statistic has a greater bearing on classic car owners due to the difficulties involved in finding replacement parts for classic vehicles as well as their additional value.
Cheapest isnít always best
The above tips are a great way of shaving money off your
annual insurance bill, but do remember that the cheapest offer isnít always
the best offer. This extends also to the car valuation, as insurers will
ask you to give an estimate valuation of your vehicle upon arranging your
insurance. However, upon making a claim many classic car owners have found
that many insurers will simply refuse to pay out the original valuation
price agreed as they will dispute the cars overall value. The only way
to avoid this happening is to arrange for an independent valuation to be
made, this way the insurer will have no choice but to hand over the money
originally agreed upon. It really depends on your situation, but many classic
car owners feel that paying a little bit extra is worth it in the long