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What happens if my classic car is totaled? | Michigan Collector Auto Insurance

posted Apr 18, 2017, 12:37 PM by Jason Grubbs   [ updated Apr 18, 2017, 12:38 PM ]
Michigan Classic Car Insurance
For most automotive enthusiasts a collector vehicle is much that a car, it's a passion - their classic vehicle is a cherished collectible they put a lot of time, effort, and money into maintaining.  These enthusiasts know their vehicle isn't a commonplace automobile that's value can be determined from a generic car valuation site.

With this in mind most collector vehicle owners wisely purchase Agreed Value Coverage for their classic car.  With agreed value coverage you and your insurance company set a predetermined or "agreed" value for your car at the time it is insured - and this is the amount the insurance company will pay if a total loss occurs.

It's worthwhile to mention collector vehicle owners should periodically review their coverage and, as necessary, make any adjustments to the agreed value.  Classic cars get better with age, especially if they are well-maintained, and you want to make sure your insurance keeps pace with any changes in value.

Even if you purchase agreed value coverage it's important to consider what happens if your car is totaled.

Repairing a collector vehicle can be a time-consuming and expensive process.  For this reason, a collector vehicle that suffers even a modest amount of damage in a covered loss may be considered a total loss - it simply depends on what it will cost to repair the vehicle in relations to its value.

It's entirely possible - especially if your collector vehicle has sentimental value - that you may want to keep and restore your classic car if it's been totaled in a loss.  In this event, what amount will your insurance company pay you?

The insurance company will happily sell you back your totaled vehicle in the form of a deduction from your loss settlement.  The amount deducted would be based on the salvage value of your vehicle.  This is where it gets interesting, especially for collector vehicles...

Michigan Collector Auto Insurance
The process of determining salvage value with Hagerty Insurance, the world's leading insurer of collector vehicles, is the insurance company would list the car at www.copart.com for 3 days.  The highest bid for the totaled vehicle would be designated as the salvage value and that amount would be deducted from the agreed value if the owner wishes to retain their totaled car.  Depending on the scarcity of your collector vehicle, it's overall condition, and the value of usable parts the salvage value could be quite significant - leaving you with far less cash than you may have expected if you choose to keep your totaled vehicle.

Fortunately, there is a solution.  Hagerty Insurance offers optional Cherished Salvage Coverage.  This additional coverage, available at a modest cost, allows the collector vehicle owner to retain their vehicle after a covered loss when it is totaled and still received the full agreed value.

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