The classic car market is booming, spurred by baby boomersindulging themselves by buying the hot muscle cars or othercollectibles they could only dream of as teenagers. According toCar and Driver, 58% of the roughly 5 million collector cars in theU.S. are owned by boomers.

Summer months mean more collector cars are out on the streetsstrutting their stuff–at car shows, drive-ins, and just catchingthe breeze. Although what makes a classic car a “collectible”is extremely subjective, some of the most popular Americanmodels are the 1971 Plymouth Hemi Barracuda Convertible; 1967Shelby Mustang GT350; 1969 Pontiac GTO Judge; 1970 ChevroletChevelle LS6; and 1963 Chevrolet Corvette Split Window, accordingto American Modern Insurance Group.

These classic autos need special protection,and smart agents and brokers can tap into a lucrative market byspecializing in this coverage. We spoke with John Spritzky, vicepresident, product management of American Modern Insurance Group, whichspecializes in insuring collector cars, about what makes this nicheunique. Read on to see his comments–and for some beautifulautomotive eye candy!

1963 Chevrolet Corvette SplitWindow (photo: Mecum Auctions)

Q: What are some of the unique exposures to insuringcollector cars?

Making sure the vehicle has the proper amount of insurance orvaluation is critical. There are numerous attributes that canaffect a vehicle's value including age, condition, modificationsand accessories. Agents really want to be thorough inconsidering the impact of these factors.

Agents should explain the importance of selecting a carrier thathas “agreed value” coverage to eliminate valuation issues during aloss. For agreed value, the insurance company will work withyou and your customer to determine how much the vehicle is worthand insure it for that guaranteed amount, regardless of marketfluctuations.

Many car owners restore collectible cars. Cars underrestoration may not be covered by some policies, so it's importantfor agents to check with their customers on whether they will berestoring the car in some capacity.

Since these vehicles are typically not for everyday use, makesure your customers select appropriate mileage plans to ensureproper coverage. The amount of miles driven annually can have animpact on the insurance premium, so selecting the right amount isvery important.

Also make sure the policy has good towing and trip interruptioncoverage is also an integral component. Given their age, thesevehicles are often susceptible to breaking down, so towing is avaluable and important coverage to have. Additionally, havingguaranteed flat-bed towing is ideal for collector cars.

1967 Shelby MustangGT350

Q: What are some other unique exposures?

Collector vehicles are susceptible to theft, vandalism, anddamage from adverse weather conditions. For that reason, manyinsurers require the unit(s) to be stored in a permanent, solidlyconstructed, structure with proper locking mechanisms. Due tothis requirement, it allows collector car insurers to offeraffordable rates (premiums) at a greatly reduced discount tostandard auto.

Avid collectors usually have spare parts, accessories, and toolsused for emergency maintenance. These extras may not becovered by a homeowners' policy. Make sure your client hascoverage for these types of parts on their policy.

Generally, collector car insurers exclude coverage forcommercial and business usage–including if the owner is receivingany financial benefit from use of the collectorvehicle. However, customers are frequenting car shows andauctions with their vehicles. It's not out of the questionthat they may be approached to be sponsored to attend these shows /events. Some insurers will allow some financial benefit to bereceived because of this type of sponsorship.

Another unique exposure is modifications on collector cars fromtheir original manufactured state, which is particularly common onstreet rods and other muscle cars. Acceptable modifications formany insurers include: non- factory supercharger / blower / turbo,nitrous, roll cage, wheelie bars and/or parachute, modified to over500 horsepower, paint / body modifications and custom fabricatedinterior. These modifications are indicators of an increase in thecost of repairs, frequency of loss, and increased performance.

1969 Pontiac GTO Judge

Q: What can agents do to expand their business in thisarea?

There are many opportunities for agents to expand theirportfolios to include collector cars. Enthusiasts frequent carshows and auctions such as Concours d'Elegance(Amelia Island, Fla. and Pebble Beach, Calif.); Autoramain Detroit; and Barrett-Jackson's Collector Car Auction in Scottsdale,Ariz. These venues provide an excellent opportunity to meetand network with the people who make this hobby such a nationalpastime.

Agents can buy sponsorships and booths to solicit thosepotential policyholders. In addition, there are numerous carclubs throughout the country, such as the Antique Automobile Club of America, theClassic Car Club ofAmerica, Goodguys Rod& Custom Assn., or the Mustang Club of America that providegreat access to groups of like-minded car owners. You cansearch on websites like Hemmings Motor News to searchfor a club near you or by a specific make/model. Going to a carclub meeting and presenting on the importance of proper insurancecould open doors to more than one new customer.

In addition, there are numerous car clubs throughout the countrythat provide great access to groups of like-minded carowners. Going to a car club meeting and presenting on theimportance of proper insurance could open doors to more than onenew customer.

Agents should evaluate their current book of business. Do youknow how many of your customers own cars that are eligible for aspecialty collector vehicle policy? It's probably more thanyou expected. Rounding out the account for those policyholdersmakes that agent more valuable to their client.

There are many publications that focus on the collector carenthusiast, like OldCars Weekly or Hemmings Motor News, forexample. Advertising in these publications can establish anagent as a specialist in dealing with these uniquerisks. There are many competitors, so the more visible you arein the hobby, the better position you will be to get newbusiness.

1970 Chevrolet Chevelle LS6(photo: Mecum Auctions)

Q: What tips would you give agents and brokers who wantto educate themselves on the collector car insurancearea?

Some of the best resources are car ownersthemselves. Agents can use the car shows and auctions as aforum to really learn specifics about the marketplace. Ownersand event facilitators enjoy sharing stories about theircars. This is a great opportunity to learn the differentclasses of antique, exotic and classic from an insuranceperspective as well.

Other resources are magazines, blogs, clubs and shows thatcontain a wealth of information about hot topics and trends withinthe industry.

Lastly, agents should talk to their carriers about coveragefeatures and benefits, exposures and underwriting criteria andguidelines.

1971 Plymouth Hemi BarracudaConvertible (photo: Mecum Auctions)

Q: How can agents take advantage of the spring/summercollector car buying season for growing their collector carinsurance business?

This is the time of year when many local car eventsbegin. Getting out in front of eager owners at car clubevents, car shows and car auctions can help build your visibilityquickly. It's all about timing and catching these potentialcustomers when their renewal date is on the horizon.