In a slow economy, many agents and business owners are lookingfor ways to improve or stabilize the proverbial bottom line. Someseek to grow existing business by cross selling and upselling,while others prospect for new clients by adding new or refreshedproducts. Regardless of the business strategy in place today, therelikely is low-hanging fruit in other lines of insurance that canimprove business while showing the customer you have their bestinterests at the top of your mind. One area to consider is thecollector and classic car market. Collector car insurance is a $3billion annual business, with more than 7 million collector cars inthe United States. However, nearly 4 million of those cars areinsured by a standard policy, which costs the customer 4 to 5 timesas much as a collector auto policy and puts agents at risk if atotal loss occurs due to actual cash value payment on a standardauto policy. Full-service independent agents can offer a profitablefull coverage product for collectible and classic cars. Bypartnering with a specialty insurance broker in the collector carmarket, you can provide lower premiums while insuring the fullmarket value of the car. Whether you are considering this coveragefor a current client or potential insured, you can leverage thesavings they'll realize on the collectible car insurance tomaintain or obtain homeowners, standard auto, and other lines ofinsurance. Car collectors and independent agents alike understandthere's a difference between the vehicles you collect and the onesyou drive every day. However, not everyone insures his or hercollectible and everyday vehicles differently. This disconnect notonly leaves collectors in a financial bind if they need to fileclaims, but could cause an agent to lose business and money if atotal loss occurs. Market value vs. cashvalue
The difference between the two coverages makesthe real difference for collectible cars. Like any other commodity,collectible vehicles–which include antiques, classics, street rods,modifieds and exotics–frequently change in value and theirinsurance should reflect that. For instance, a 1967 Shelby Mustang,which just a few years ago could be bought for as low as $35,000,is fetching around $200,000 at large auctions today. In thisscenario, if the customer has a total loss, he or she is outhundreds of thousands of dollars. If the car is insured bycollector car insurance, the customer would receive current marketvalue for the collectible auto. The average premium for collectorcars is around 4 times less than standard auto coverage, rangingfrom $150 to $300 per year. Traditional policies typically requirecoverage equivalent to an owner's primary car, even though thecollector car is only driven around 1,000 miles a year. And in atough economy with fluctuating gas prices, many car collectors aredriving their classic cars even less, while some are simply parkingtheir prize possessions to save money. By evaluating unused miles,agents can pass along even more cost savings to the customer withlower rates for lower mileage. A typical collector policy willoffer three mileage cutoffs: 1,000, 3,000 or 6,000 miles per year.Finding the collectors
You may be wondering where to find the car collectors andenthusiasts. The most cost-effective method is to notify yourcustomers of the new offer. You might be surprised at how manycustomers have the vehicle and simply insure it with another agent.Also try the local car show. Whether you exhibit in a booth, passout flyers or just mingle with the owners, the word spreads fastamong this tight-knit group of hobbyists. Whether collector carinsurance gives an agent the ability to provide an enhanced productto full coverage customers or enables the agent to appeal to newcustomers, car collectors benefit from a lower premium and peace ofmind while agents offer more value to their relationships andopportunities to grow businesses. In fact, customers enjoy 60 to 75percent savings on premiums each year while agents enhance theirbooks of business with new business and renewal commissions, newcustomer base and cross selling existing customer base. Attend thenext local car show and find out how many collectors arelow-hanging fruit for your business.