COLLECTORS INSURANCE MADE SIMPLE

(OR WITHOUT TEARS) Writes Peter Higgins of Historic Vehicle Insurance Services (A Division of C.H.P. Insurance Brokers Ltd.) Now that is a brave title because insurance never seems simple to the average person but then neither is the law, or how a computer works. However, to an expert in the field these things are a little clearer. Most people read their policy when they have a claim, which can be too late! A bit like reading your workshop manual, as I once did after the job had gone horribly wrong on me. Now I tend to read it and get an expert to explain! The principle behind insurance is that many pay into the fund so that the unfortunate few are able to draw out. The underwriters working for the insurers looks on it as his/her job to ensure that those who join the fund pay their fair share. Some underwriters have more flexibility than others but remember, an underwriter that produces a loss will soon lose his job! Many years ago the point was made that certain vehicles did very little mileage and therefore the chance of being involved in a motoring accident were reduced. Thus there was a case for premium reductions on those vehicles. Together with this came the demand for more certainty in the amount that would be paid out for claims on vehicles where the normal rules of depreciation no longer seemed to apply. Clever underwriters and brokers combined these together and developed the specialist insurance policies that today help vehicle enthusiasts contain their insurance costs. Competition between underwriters for this slice of the insurance market has produced many different policies with their own subtle differences as each underwriter struggles to produce a profitable account for his employer, be it a Lloyds Syndicate or an insurance company. All true enthusiasts know what happened - people more interested in money than cars joined our hobby, playing hell with the values of our cars. Then came the recession together with the increased crimes against cars producing more claims that predicted, plus a crop of suspect claims. So we now have the present confused state of the insurance market with underwriters being far more sensitive on values, on who drives the cars, where they are kept, which vehicles produce more claims. They try to identify, who is the enthusiast as distinct from the person who just runs older cars,but thinks he can get cheap insurance if he calls it a "Classic". That is enough of the history so let's get into the hard information. Most collectors' policies are Comprehensive? What is Comprehensive? Well, which shade of green is British Racing Green? Insurance policies consist of written sections that add up to form your policy. To read your policy you need the policy document, the certificate and the schedule, plus each document that your insurer has issued since you started your contract with them. These documents might contain written policy endorsements which adjusts the basis of cover, such as an increase in policy excesses. How to actually read a policy, which is a legal contact, could be the basis of a further article. What I want to do now is give you some information, advice and thoughts. AGREED VALUE This is the maximum the company have agreed to pay up to in respect of a loss or damage claim. In a simple case like theft of your vehicle, which is not found, they buy your vehicle at the agreed to pay up to in respect of a loss or damage claim. In a simple case like theft of your vehicle which is not found they buy your vehicle at the agreed value stated in your insurance policy documents. The value only becomes agreed when the insurers have accepted the value put forward by you. They can ask for further information or put forward a reduced value for you to consider. Sometimes there can be a delay between the issue of a cover note and the provision of evidence needed to agree the value of your vehicle; this delays the value you put forward from being accepted. Not many people present me with a proposal form, photographs, plus perhaps a valuation if required by insurers, all at once. So if cover has been given before insurers can agree a value and a claim occurs before the value is accepted. This is dealt with on a market value basis as per normal insurance. This is subject to an upper limit of the value you stated. So do not expect to purchase your car for £15,000 and get insurance for £20,000 without a good explanation! After all, the insurers will not permit you to make a quick £5,000 profit if you crash it on the way home! Make sure the correct purchase price is shown on your proposal form; you don't want the insurer to think you are attempting fraud if after a theft claim they investigate and find out from a previous owner that you did not pay them what you said on the form. For those who have restored or rebuilt their vehicles my advice is to keep a detailed log of bills, time spent and photographs of the work on progress. This will ensure you get the maximum agreed value possible. The insurer may accept the principle that your loss would be what you have spent but I would stress that getting an agreed value over the perceived market price is extremely difficult. Most agreed values depend on the quality of the photographs you can supply so make sure you do your best. Flash photographs at night, polaroids, photos of vehicles with no registration numbers on and frontal with the rest of the vehicle in the garage are definitely a no! no! Our standard advice is:- Photographs 1) front and driver's side view. 2) rear and passenger's side view. 3) open engine bay 4) open boot area 5) interior If you car has an above average engine bay or interior, we suggest photographs of these be submitted as these do help in obtaining above-average values. If your car has a "History" that will enhance its value, please tell us. GARAGING - or where your vehicle is kept when not in use, insurers are becoming paranoid about this at the moment. However, I do know that there is one company where that car does not have to be garaged at all but it's a limited policy. Some policies have time limits if you leave them out overnight in the vicinity of your home address. So, if you are too lazy to move it from your drive into your locked garage one night and it's gone in the morning, don't expect to be paid out. Other insurers require that it is garaged when not in the course of a journey. That does not, of course, mean you have to take your garage with you when you go on holiday! Remember - locked garage means LOCKED garage. See it from their point of view. Your car, sitting on the drive or parked outside your house on a regular basis, is there for the taking. As I see a cheque for £6,000 go across my desk for a stolen Sprite this means that 75 other Sprite owners' insurance premiums have been used to pay this out. So now you will find underwriters being far stricter on what they want. No longer is an unsupervised garage a few miles away from your home being considered. WHAT 'S A CLASSIC VEHICLE - or which vehicles are eligible? What a nightmare! The insurers definitions have all been revised - age plays a more important role. Another factor coming more into play is the fact that the vehicle does not have to be your main form of transport. MODIFIED - or non-standard vehicles. In the god old days a Mk1 Sprite with a supercharged 1275 engine was acceptable to one leading insurer on their scheme; now I have to smooth the way for a Sprite with a fibreglass bonnet on their policy. Remember the first level of person you may speak to if you deal direct with an insurer may not even drive or know what a Sprite is! So if your vehicle is not original then it's easier for them to say "No" - after all, it will not get them into trouble! Do not be tempted to ignore it and not tell the insurers because if it's damaged they inspect and make notes. If they want to walk away from the claim it could be the excuse they give. If it's stolen, then you will tell them when you list all the extras like the modified 1275cc engine in your Mk1 Sprite you may find you have problems. Some underwriters are closer to the market understand better than other insurers and do not charge for modifications/upgrades. Some underwriters charge extra just as they may do for left had drive cars. If is always best to discuss the position with someone with a more detailed knowledge. LIMITED MILEAGE Limited mileage is what it says it is! So choose your limit with care and keep records so you can prove you are within your limit in the event of a claim. Some companies will allow you to increase to a higher limit if you are getting close to the chosen limit Remember, if you have chosen 1,500 miles ask at 1,400 before you go over, it's late if your have had a claim. After all, which bookmaker allows you to back a winner when the race has been won? Strangely, the insurers will not give you a refund should you choose a higher limit and find you have not reached the lower limit. Remember, each contract is an annual contract, so don't expect to carry forward unused portions of mileage into your next year! Make sure your speedometer is working and when the car has its MOT that the garage put the correct mileage on the MOT certificate. If you have an annual declaration to make, put it in writing and keep a copy. USE TO WHICH YOU PUT YOUR VEHICLE What you use your vehicle for? Insurers have difference views on permitted use. The standard permitted use is SOCIAL DOMESTIC AND PLEASURE. To one company this use excludes any commuting to a permanent place of work. Others include this in their definition but if you use your car for business, then you may find that you have a problem. S0 - on a nice day, the solicitor who goes to work in his Classic and then decides to visit a client could find he has problems. Remember, what you asked for and, if you wish to change the use of your car, ask! USE ON RACE CIRCUITS! No-one expects to be covered in competitions but will you policy cover you in a club "TRUNDLE" or instructions day at the circuit? Racing is a NO NO but a club day out - well, different insurers will give you different answers - always worth a try. Most insurance policies now exclude use of the car on a race track for any reason CLUB AUTO TESTS Again different views are expressed depending on the type of event involved. If you do it - ask! You would not like to be the one to lose control and hit a bystander. Finding your self at the mercy of the lawyers without insurance support. Remember the ideal risk is the man who drives his car to the concours, displays it and then drives home to his locked garage. FOREIGN USE Most companies will extend their uk policy to full cover when abroad, but be expect to show that you will stay within your mileage limit. One company will not extend to travel abroad ask before you take out your policy. Check with your insurers before ! CLAIMS I could write a whole separate section on this. I have had my Healey since 1968 and would really like to keep it. Will your company allow you to keep the salvage in part settlement of your claim? The salvage value of the parts may be of more value to you than the insurers are offered for the wreck by the trade. SPECIALIST REPAIR Can you take the car to an expert in the know? Not all companies will have the same detailed knowledge you have! Simple jobs like fitting a big Healey front wing can cause those brows to wrinkle at those garages that are used to repair modern cars! SUMMARY To most of us our collectors' vehicles are precious toys to replace our Dinky's and Meccano sets. I hope this information will enable you to look after yourself and your toys. Remember, experts in this field will be glad to give your specific advice and answer your specific questions on the policies they retail. Please read you own policy if you already have a vehicle. Check you own particular cover. There will be policies that I have never seen with different workings reflecting different attitudes. You could be lucky enough to own a Ford GT40 in which case the insurers might have special terms like supervision at all times! It was reported in the papers that someone drove a Jaguar XJ220 from a display without permission! I hope you enjoy your vehicles and the above information will help you. The above information was printed in Rev Counter the Austin Healey Club magazine as general insurance information to its uk members.

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