Given that most classic & collectible cars spend far moretime ensconced in (often custom-designed) garages than they docruising through traffic, it should come as no surprise that manyclaims stem from incidents that occurred on the insured's ownproperty.

“Many claims have nothing to do with collisions, but are relatedto storage issues—something falls in the garage or there's floodingor rodents or a hazard from construction going on next door,” saysMcKeel Hagerty, CEO of Hagerty Insurance—who also knows of a claimrelated to a horse getting loose in an insured's garage (no word ifthe damage was to a Mustang).

Engine fires are another frequent source of insurer payouts,according to Rick Drewry, a senior specialist in motorcycles andcollector cars at American Modern Insurance Group.

“We see a lot of water-damage claims,” adds Richard Standring, arisk services manager at Fireman's Fund Insurance. “When you'redealing with high-end collector cars, a burst pipe can cause$100,000 worth of damages to the interior of a vehicle.”

As such, underwriters pay a lot of attention to where the carsthey will be insuring are garaged. “Policyholders with large,important collections will have storage facilities custom built forthis purpose with temperature and humidity controls, special lightfilters, monitored fire alarms, cameras and motion sensors,” saysStandring.

Chubb has a client in Florida—with a collection worth in excessof $100 million—whose facility is designed so cars can be moved upto the second floor in the event of a flood. The insurer will alsodo thermal-scan inspections of a storage spot. At least once, thisservice turned up a hot spot on the main circuit-breaker panel thatcould only be seen in an infrared view—a problem that could haveresulted in a fire-causing short.

Even for much less-exalted collections, most insurers willrequire vehicles to be kept in a garage—though some policies willmake exceptions for carports in Sun Belt areas where garages arerare. 

Another common cause of non-driving claims: damages that resultfrom flying rocks when a car is being transported—to a show or asecond home. When sending a car overseas, insurers generally preferit be done by air freight rather than a cargo ship. And fordomestic transportation, the ideal is a fully enclosed transportvehicle, not an open-bed truck, says Donald Soss, a vice presidentin Fireman's Fund Private Wealth group.

When actual driving incidents occur, a disproportionate sharehappens in the spring, right after a car is first removed from itswinter hibernation and is at its most temperamental. “On that firstride of the spring, you hit the pedal and it goes straight to thefloor,” says Hagerty, describing a not-uncommon cause ofclaims.

As with so many other lines of business, one way carriers andspecialists look to separate themselves from the competition iswith the quality of their claims service—an especially importantpoint for classic-car collectors.

Given the age and rarity of the assets, finding spare parts canbe both difficult and expensive. So when shopping for a carrier fora client—who is more likely to view his car as a favorite pet thanfour wheels and an engine—independent agents and brokers should besure to choose a partner that can draw on vast experience (androbust databases) to help locate, for example, the rightfender.

“When a customer calls us with a claim, it takes seconds to putthem at ease—because they immediately understand we know what we'retalking about,” says Drewry. A standard-lines carrier “might begood with a Toyota Camry—but  we know what it takes torepair a Chevelle LS6.”

Another important consideration: Does the policy allow forinsureds to use their own, preferred restoration shop? Many do (andunderwriters maintain lists of shops they can recommend).

“We had a client in Florida who wanted to work with a specialistrepair shop in Wisconsin—and we had no qualms with that,” says JimFiske, vice president and U.S. marketing manager for Chubb PersonalInsurance.

While all the carriers and specialists interviewed byNU stressed they will let clients use the repair shopsthey are most comfortable with, Hagerty has a unique twist: Thecompany will pay their insureds an hourly wage if they do therepairs themselves.