If you are a classic car owner, you will need to have it insured. Before getting insurance coverage on your prized possession though, you need to know which insurance policy would be best for you. Unlike regular cars, classic cars appreciate in value with the passage of time. For regular cars, the contrary is the case. As such, a conventional car insurance policy might not sufficiently cover your car. You’ll need something more. In this case, an agreed value car insurance might just be what you’re looking for.
Agreed Value Car Insurance
To ensure a full indemnification in the event of a loss of value on your classic or antique cars, it is best you take out an agreed value car insurance. What is agreed value?
Agreed value is an amount that an insured and his insurer agrees on beforehand to be the value of the vehicle to be insured. Thus, in the event of a total loss, the insurer must pay the total sum of the agreed value to the insured.
There are several ways this value is arrived at. Usually, it is based on a professional appraisal of the vehicle to be insured. If at any point the value of the vehicle increases, the insured could request for a change in the agreed value to reflect such increase.
Why is Agreed Value Best for Insuring Classic Cars?
As a classic car owner, you will want to protect your investment to the fullest. Regular car insurance policies can’t do that for you as it might not cover the real cost of the car. Thus, in the event of a total loss, you would only recover an amount that might be nothing close to what your asset was worth. With agreed value, you can choose the amount you want your car insured for. If the insurance company agrees to it, then you can rest assured that you’ll fully recoup your losses and maybe even more if anything should happen to the car.
The Cons of Agreed Value Insurance
One of the major disadvantages of taking out an agreed value insurance that is higher than the market value is higher premiums. Since the agreed value for classic cars is usually high, the insurer would have to keep paying high premiums to hold on to the coverage. Sometimes, one might think why he needs to keep paying such high fees when nothing has gone wrong with the car for the longest time. To be on the safe side, you should keep it insured because you never know.
Also, there are some insurance companies that revert the terms of an agreed value insurance to that of market value upon renewal of the insurance coverage. As such, you must be careful when filling the form to renew your classic car insurance policy.
In conclusion, while taking out an agreed value insurance might be expensive, it would definitely be worth it if something unfortunate happens to your car and leaves it totaled.