Reducing Agreed Value

[Curtis in MA]

I was reviewing my insurance policy and notice a $20,000 agreed value.
I don't think the car is worth this. What would you estimate it at?

The car is a 1930 standard coupe without a rumble seat. Stock except for alternator, oil filter and turn signals. One fender and rear spares. Drives well. Have done a few 100+ mile trips.
Been in the family for 60+ years so no plans to ever sell it!

[Corley]

I just switched from Hagerty to the Corvette National collector insurance, as it turned out to be a lot cheaper, and is more tolerant of pleasure driving. I put 10 collector cars on it, for less than $500/yr. What I DID find is that the agreed value makes a huge difference in the premiums. I recommend you keep the agreed value at a reasonable level.

Just my recent experience.

[WHN]

Do you have antique car insurance or regular car insurance?

If antique car, the savings by reducing agreed upon value might not amount to very much. Worst case, you would get $20,000.00 if you have a total lose.

Need pictures and more info for a closer price estimate. I would save $20,000.00 seems high.

[Curtis in MA]

I have regular plates on it and have it insured by Hagerty.

[1931 flamingo]

The savings would be minimal, IMO.
Paul in CT

[Corley]

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Once again, my recent actual experience was that agreed value made a big difference. Went from $9500 to $12000 on two vehicles, and the premium jumped almost $100/yr. Hagerty was almost twice the premium for only 6 vehicles that NCM is charging for 10 vehicles. Better than asking us, why don't you just call your agent and ask, it is there job to answer those kinds of questions.

[Curtis in MA]

The agent couldn't put a value on my car.

[CarlG]

But he could tell you what the premiums would be for a $20K car vs a $10K car.

[Curtis in MA]

Difference between 20 and 15 is $42/year

[redmodelt]

Without eyes on WE can't put a value on your car to know where $20,000 falls in it's value. It could be way high or close. You need to do some research, what have cars like yours sold for? Not cars at big house auctions, but privet parties or ebay sales. What does blue book say? Is keeping the rates where they are at going to break the bank, $42 over 365 days is a little over .11 1/2 cents per day.

[BRENT in 10-uh-C]

Originally Posted by Curtis in MA

I was reviewing my insurance policy and notice a $20,000 agreed value.
I don't think the car is worth this. What would you estimate it at?

The car is a 1930 standard coupe without a rumble seat. Stock except for alternator, oil filter and turn signals. One fender and rear spares. Drives well. Have done a few 100+ mile trips.
Been in the family for 60+ years so no plans to ever sell it!

Originally Posted by Curtis in MA

Difference between 20 and 15 is $42/year

Maybe so but then again let me share something that may change that intent for you.


So with a little background here, I am an approved repair facility for several collector car insurance companies, and from what I have witnessed in the past, -what you are about to do is going to potentially create quite a bit of stress for you should you have a claim. Most insurance companies now consider a claim that is 80% or greater a total loss. That means at the present stated value, a $16,001.00 estimate of repair now moves the vehicle to salvage state. Due to regulations and contracts with salvage companies, it is rare that the owner gets to "buy back" their vehicle from the insurance company because the salvage companies are under contract where they must take all of the vehicles. Therefore these Salvage Companies want collector vehicles because their ROI is greater than a totaled 2006 Ford Taurus for example.


So suppose your new policy goes to $10k. That means that at an $8k estimated repair (80%), your vehicle is no longer economically feasible to repair in their eyes and is now considered salvage. As a shop owner, I can tell you straight-up that $8k does not go far when repairing damage.


Another thing that I have noticed is most adjusters have no clue as to collector vehicle repair as most are independent adjusters working on a flat-rate per claim and have no real collector car experience. So what they will do is write an estimate that seems believable to the customer and the insurance company, and if there are any supplimentals, then that is handled separately with additional pay for them. I have a 1958 Buick Roadmaster in here right now where the adjuster estimated the repair at a little over $3,800 at the insured's home. State Farm issued a check to the owner for the estimated amount however fortunately the owner had not deposited the check into his bank yet. In the interim, the owner contacted me and then the car was shipped to me from over 100 miles away because I was the closest repair facility that dealt with collector cars. My estimate is over $9k because the quarter panel is buckled, there is hidden damages, and there is a lot of stainless steel trim and chromed pot metal damage. If the owner had deposited the insurance check, that would have likely settled the claim as far as the insurance company is concerned and the owner could have been out over $5k.


Two things play into this; first, the Adjuster was likely doing the best he knew how to do under the circumstances he was put in however most are unfamiliar with collector cars in general, and more specifically stainless repair and bumper plating costs. In this particular case, the adjuster just substituted a plastic bumper cover instead of plating costs, and left stainless trim replacement costs blank. This brings up the second side of this in that insurance companies know that some people like to pocket the money on claims instead of actually repairing the item, -and as such they generally write the estimate lower with an understanding that if the owner can submit receipts & invoices for the replacement/repair of the damaged pieces, then they will gladly pay the difference. So in this particular claim, all I must do is submit invoices for the bumper to be replated (over $2k), all of the trim repair & straightening (likely another $2k) and other britework repairs. In addition, the paint on this vehicle is not that old but it was a poorly done BC/CC job. Since the Qtr and the Deck Lid have suspect substrates, I told the adjuster that he would need to get a release from the customer to me unless I stripped all the paint and started over. So by the time I added the frame repair time, bumper bracket straightening, and all of the other items, we were around $9k. He was not upset between the two estimate differences, and he authorized me to proceed. The owner has an agreed policy that is over double of what the estimate was, so we are moving ahead, and the customer will be receiving a much better job than had he tried to do the repairs himself. I am not advocating that folks should only use collector car shops however I am saying that things are not in your favor if you choose to make the repairs yourself without someone who understands both sides.


.

[larrys40]

Brent,
Well said. Most folks "underinsure" their cars for loss or damage. I would never be cheap on the valuations as you really can't begin to replace them or make them whole and recover with conservative values. The cost for the insurance value is much cheaper than the cost to "fix or replace" it if something should happen. You explained the process well.

I only added my comments to add reinforcement and a little more icing on the cake as most folks don't realize how expensive repairs or replacements can cost.
Larry

[Synchro909]

I've been in the situation where clueless assessors tried to put a price on repairs to my Model A. It had been hit on the RH front corner. they couldn't understand why the left mudguard (fender) needed attention because they had never dealt with a car that had a headlight bar. When the total cost was revealed to them, they wanted to write it off, expecting to be able to claim the salvage. I told them NO! Firstly, they have no agreement from me consenting to them taking my car under any circumstances. They argued that it was standard practice (Like Brent says). I pointed out that under my policy, I retain the salvage rights. They checked with my insurer and related. I still consider this to be my best encounter with an insurance company and I still have the car after repairing it myself.

[CHuDWah]

Originally Posted by Curtis in MA

I was reviewing my insurance policy and notice a $20,000 agreed value.
I don't think the car is worth this. What would you estimate it at?

The car is a 1930 standard coupe without a rumble seat. Stock except for alternator, oil filter and turn signals. One fender and rear spares. Drives well. Have done a few 100+ mile trips.
Been in the family for 60+ years so no plans to ever sell it!

FWIW, NADA lists retail on your car at $9,450 - $27,700. The average is $15,500 and a quick perusal of online classifieds shows that to be in the ballpark. If you insure the car for that and it's totaled, you can just take the insurance check and buy another one. BUT...since it's been in the family for 60+ years, you probably want to hold on to it and repair it if at all possible. In that case, what Brent posted above kicks in.

[Corley]

Sounds like you have all the information you need and the decision is yours. I wouldn't go too cheap on it, but be reasonable. My rule of thumb on this is put the agreed value at whatever you would take for it.

[Curtis in MA]

Thanks everyone.

[mike657894]

I would think what does it cost to replace the car. Then add the deductible so If there is a total loss you can replace your car.

[Nabco]

Originally Posted by Corley

I just switched from Hagerty to the Corvette National collector insurance, as it turned out to be a lot cheaper, and is more tolerant of pleasure driving. I put 10 collector cars on it, for less than $500/yr. What I DID find is that the agreed value makes a huge difference in the premiums. I recommend you keep the agreed value at a reasonable level.

Just my recent experience.

I would be curious as to your comment on NCM being more tolerant of pleasure driving, I also have a corvette show car and getting ready to buy a second one, I Checked with NCM and I found they were far less tolerant of pleasure driving then Hagerty, I even get unlimited mileage on th Vette.

[Jeff/Illinois]

Originally Posted by Curtis in MA

Been in the family for 60+ years so no plans to ever sell it!

This definitely changes things. Having a car in the family since the middle 1950's or so has to have a lot of memories.

You won't be happy with the Insurance Company giving you a check to go buy another Coupe and taking this family heirloom for salvage. And if you reduce that coverage to $10K you probably won't get the Coupe you would like to have and will end up spending the extra dough to bring it up to snuff.

My advice would be to pony up and increase the coverage, so that this story has a happy ending.

Reducing the value from $20K to $15K is a reduction of 25% for a savings of 42 bucks. I'd raise it 25% to $25K and pay an additional 42 bucks. That's less than a dollar a week; about 80 cents. Or one guz burger at McDonald's off the dollar menu.

[Corley]

Originally Posted by Nabco

I would be curious as to your comment on NCM being more tolerant of pleasure driving, I also have a corvette show car and getting ready to buy a second one, I Checked with NCM and I found they were far less tolerant of pleasure driving then Hagerty, I even get unlimited mileage on th Vette.

I had Hagerty for about 15 or more years, so I am pretty familiar with their policies.

You must be talking to a different person than me at both places as to the driving restrictions. Hagerty said club events blah blah blah, and occasional pleasure driving, such as an occasional dinner out. Ncm said club events, blah blah blah, and "pleasure driving", just not regular transportation. With ncm, you also pick the mileage you think you might use, 1000, 3000, or 10,000. Tell Hagerty you plan on 10000 miles of pleasure driving and see what they say. Or, better yet, read your policy. My Hagerty policy stated only occational pleasure driving was permitted. That doesn't sound more liberal to me, and certainly not unlimited, but your money, your policy. It's really a personal choice.

Also, I liked the $489 with ncm for 10 vehicles vs $897 for only 6 with Hagerty. I have several more project vehicles, which are not covered, and never ever driven. With so many vehicles and projects (nicer name than junkers), I often don't drive some of the covered ones in two or three years anyway, so lots of miles is not really an issue for me.

Of course with either, you must have other conventional insurance on your daily driver(s). All collector insurance requires that.

[Nabco]

Originally Posted by Corley

I had Hagerty for about 15 or more years, so I am pretty familiar with their policies.

You must be talking to a different person than me at both places as to the driving restrictions. Hagerty said club events blah blah blah, and occasional pleasure driving, such as an occasional dinner out. Ncm said club events, blah blah blah, and "pleasure driving", just not regular transportation. With ncm, you also pick the mileage you think you might use, 1000, 3000, or 10,000. Tell Hagerty you plan on 10000 miles of pleasure driving and see what they say. Or, better yet, read your policy. My Hagerty policy stated only occational pleasure driving was permitted. That doesn't sound more liberal to me, and certainly not unlimited, but your money, your policy. It's really a personal choice.

Also, I liked the $489 with ncm for 10 vehicles vs $897 for only 6 with Hagerty. I have several more project vehicles, which are not covered, and never ever driven. With so many vehicles and projects (nicer name than junkers), I often don't drive some of the covered ones in two or three years anyway, so lots of miles is not really an issue for me.

Of course with either, you must have other conventional insurance on your daily driver(s). All collector insurance requires that.

Thanks for the response, I really want to understand the differences, I’m going to give Hagerty a call today to verify and have them point out to me where in the policy this is covered.....I do have a “policy highlights” document that states.

Flexible Usage
Our custom designed policy doesn’t restrict usage to just parades and car shows; we encourage you to drive your classic just for the fun of it.

Now this isn’t the policy it’s just a marketing piece but I’ll check back in after I talk to them....probably going to reach back out to NCM too.

Thanks again,

Nick

[Nabco]

So I talked to two people at Hagerty today including a supervisor, I went through my policy two times and could not find any reference to “usage”. I asked the people at Hagerty to refer me to the place in the policy that’s talks about usage, the answer was it no longer exists, they DO NOT restrict the use of any classic car they insure, they want people to drive their cars, regardless if it is to a parade, a club event, a car show or just for fun, they used the exact words “just for fun”.

Their logic behind this is that people that own classic cars take better car of these cars then probably anything else they own, if they do not restrict usage that will bring more customers to them....makes perfect sense. The only restriction they have is they will not insure a classic car if it is your only vehicle, you must have another vehicle.....again makes perfect sense.

I got busy this afternoon and didn’t have a chance to call NCM but will do that tomorrow and ask the same question.

[Jeff/Illinois]

Originally Posted by Nabco

Their logic behind this is that people that own classic cars take better car of these cars then probably anything else they own,

That's the way they described it to me also. And, it is very true.

Been awhile since I crawled under the everyday driver Ford Escape to wipe down the underside let alone wax any of it!!

[MBI Houston]

That was a great reply Jeff!

[Nabco]

Update:

Just passing on this information as a source of reference for everyone.

Just spoke to NCM and Hagerty again this morning on allowed usage, I asked them both the exact same question.....this is more geared towards driving my Corvette but would be the same on the Model A.

“I’m playing golf tomorrow at my club, would I be covered if I drove my car to the club and parked it there for 4 hours while I played golf”

NCM - they said I WOULD NOT be covered for that kind of usage.

Hagerty - they said that would fall under their pleasure driving and I would absolutely be covered.

Now I would never drive the Model A to the club to play golf, but I would the Corvette.

The woman I spoke to at Hagerty (also mentioned this in an earlier post) said these usage policies were changed at the beginning of this year so their customers could enjoy their cars more...they even have something new called Seasonal Driving that allows you to use your classic car as a daily driver for the summer, adds about $50 per year to the premium cost.

I asked NCM to send me their policy and it does specifically outline how the car can be used, the new policy from Hagerty does not even have a section on usage in their policy.

So for what it’s worth I really think Hagerty is the way I’m going with both cars.

[Corley]

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Nabco Update! After reading your post on your calls to both Hagerty and NCM, I made those same calls myself, and I got VERY different answers! Hagerty said that if you plan to drive your collector car more than 1-2000 miles a year, they don't consider you a good fit, and would likely reject you. I asked about the golfing outing, and the answer was that they don't want you to do that, because golf parking lots are high risk areas. The more questions that I asked, the more restrictions they mentioned. As to a new policy encouraging you to drive your collector car more, there is no such policy, and nothing new as of this year. After about 20 minutes on the phone with them, the guy finally said that NCM is more tolerant to number of miles, and to newer vehicles than they are, but about the same on everything else. They wondered who you talked to, as you seemed to have gotten some wrong answers.

The NCM person also said that golf course parking lots are a high risk place, so not encouraged as a regular thing. Basically exactly the same as Hagerty. All the other restrictions seemed about the same to me, except as mentioned, NCM has higher miles allowance if you specify it, and they are more tolerant to newer vehicles.

So, in the final analysis, all collector car insurance seems to be about the same coverage, price seems to be the biggest difference. One thing that was obvious, Hagerty did not want to be nailed down on specifics and waffled a lot. NCM was more black and white on things.

[Nabco]

Originally Posted by Corley

Nabco Update! After reading your post on your calls to both Hagerty and NCM, I made those same calls myself, and I got VERY different answers! Hagerty said that if you plan to drive your collector car more than 1-2000 miles a year, they don't consider you a good fit, and would likely reject you. I asked about the golfing outing, and the answer was that they don't want you to do that, because golf parking lots are high risk areas. The more questions that I asked, the more restrictions they mentioned. As to a new policy encouraging you to drive your collector car more, there is no such policy, and nothing new as of this year. After about 20 minutes on the phone with them, the guy finally said that NCM is more tolerant to number of miles, and to newer vehicles than they are, but about the same on everything else. They wondered who you talked to, as you seemed to have gotten some wrong answers.

The NCM person also said that golf course parking lots are a high risk place, so not encouraged as a regular thing. Basically exactly the same as Hagerty. All the other restrictions seemed about the same to me, except as mentioned, NCM has higher miles allowance if you specify it, and they are more tolerant to newer vehicles.

So, in the final analysis, all collector car insurance seems to be about the same coverage, price seems to be the biggest difference. One thing that was obvious, Hagerty did not want to be nailed down on specifics and waffled a lot. NCM was more black and white on things.

Ok I guess you’re right and I’m wrong....you win, I’m done 👏

[WHN]

No ones uses J. C. Taylor?

[Jeff/Illinois]

Corley sounds like you called United HealthCare. You get a different story depending upon whom you spoke to and what time of day you called

Yeah you're covered go ahead and have that $20K CAT scan,,, call back next day somebody else says 'no way' unless you want to pay out-of-pocket you're not pre-approved. We won't pay.

Call again and somebody else says 'oh you don't need to be pre-approved. We'll cover it don't worry.'

Doctor's office calls and gets somebody else, 'No we won't pay but will put him on a fast track for pre-approval wait for our call.'

SIX WEEKS later 'OK go ahead.

I'd hate to be in an auto accident and wait 6 weeks for these guys to say 'go ahead'.

Maybe that is what has happened with these insurance companies. Outsourced their work to low paid people who don't know what they are talking about.

[Corley]

I think you hit the nail on the head, it's all in who you talk to and what you ask, plus the phase of the moon. Horribly confusing, and the worst part is, you will never really know until you use it. CRAP I say, just CRAP! I'm also done, and will just keep on keeping on.

[tackle51]

Brent, thanks so much for the explanation of how the insurance works. I've insured one or two drivable antiques since 1979 and had no idea about this.

[tackle51]

Brent, thanks so much for the explanation of how the insurance works. I've insured one or two drivable antiques since 1979 and had no idea about this.

[31Cabriolet68-C]

Do any of those outfits mentioned above deal with the salvage/buy-back problem. I'd want my car back even if some 'adjuster' doesn't know an A from an Accord.....

[Hoop]

When deciding on the AGREED VALUE, keep this example in mind.

Say you have a nice Model A Roadster and cleverly insure it for $10,000 Agreed Value. It's a little less than it may be worth, will save you some premium, but it provides plenty of coverage for fender-benders for sure.

Your long-time family owned A is then caught in a major hurricane. The insurance company declares it a total loss at $10,000.

The A becomes theirs, after paying you the full amount of the coverage, since they have all salvage rights. You have the option of buying it from them, and you tell them you'd like to do that.

They agree and tell you the current bid for the salvage is $13,000 ... remember they have all salvage rights. You have to bid on it, and it'll cost you closer to $14,000 to get your Model A back.

(Actually happened, Hurricane Katrina, Louisiana. "We know a thing or two because we've seen a thing or two.")