There's a reason I have a distinct memory of the firstcollectible car policy I ever wrote. That's because I wrote it formyself. No one can accuse me of not practicing what I preach!

I've been in the insurance business for more than 20 years, butmy involvement with classic cars goes back even farther. I sharedan interest in antique automobiles with my grandfather, and thefirst car we rebuilt together was a 1968 Olds 442. Later, my ownfirst car was a painstakingly restored 1967 Olds 442, and realizingit needed insuring beyond the typical auto coverage, I sold myselfa policy when I entered the insurance industry in 1985.
Since then, my interest in collectible cars has only continued togrow, and so has my list of collectible car customers. Of my900-plus clients, 10% of them have bought collectible carinsurance. In turn, 90% of that number have gone on to purchaseadditional auto or homeowners policies from me. Today, more than20% of my agency's $850,000 annual revenue is related to mycollectible car customers.
I sometimes have the strange notion that this isn't “fair,” that Ishouldn't be able to make money on something that's also a hobby.But isn't that everyone's dream? I get tremendous enjoyment out ofclassic cars, but you need not be a collector to profit from thisbusiness niche. In fact, in terms of ease of sales and service, andthe continual opportunity for growth, I think collectible carinsurance is about as good as it gets in our business. The policiesalmost sell themselves, and the client base represents preciselythe sort of demographic we all spend our careers looking for.
In this article, I'll provide a little more detail on how I'veridden the ever-growing interest in collectible automobiles–andmake no mistake, that interest is huge and nationwide–down the roadto greater sales.
A Ford by any other name
When is an “antique” not a “classic”? In the auto industry. In thiscontext, any car 25 years old is considered an antique. So, if forsome reason you still have a 1976 Ford Pinto, you might be pleasedto learn that it has attained the venerable status of “antique.”But to be considered a “classic” car, the vehicle must havecollectible value. Unfortunately, while the Pinto might have greatsentimental value for you, it's not likely to be shared by manyothers, so it's not a classic or a collectible.
When people think of “classic cars,” they usually think ofsomething like a Model T or the 1930 Packards they've always seenin gangster movies. Yet many quite modern cars are classics, too,because a classic car for insurance purposes need only reach theripe old age of 15 in some cases. And so Chevelles, Camaros, GTOs,and Mustangs can be as “classic” as the first Edsel to roll off theline, since they have collectible value. Age and condition don'tnecessarily qualify a vehicle; supply and demand, as determined bycollectors, do.
Most important, however, a vehicle has to be almost completelyintact (with original parts) and usually fully restored to meet thecollectible standard. This is known as a “stock” car. Each carrierhas its own definition of “intact,” but they're all fairly strict.Minor adjustments are usually allowable. For example, somecompanies make CD players that resemble the originalfactory-installed AM radio, and carriers normally won't object tosuch a small modification. But if you're looking to put in a sunroof–think twice.
Antique vehicles that have been altered in some substantial way canbe insured with “modified” policies, which are kind of a middleground between a standard collectible car policy and regular autoinsurance. For example, a 1950 Chevy truck chopped up into a streetrod (flame decals and all that) would be eligible for a modifiedpolicy. Where a typical collectible policy would have a zerodeductible, the modifieds would include a deductible and require ahigher rate.
In terms of premiums, collectible car policies are much, muchcheaper than standard auto insurance. By way of illustration,recently I wrote a policy for a 2005 Jeep Liberty for a 60-year-oldwoman, and the premium was about $950. If that car got totaledbefore dinnertime, the National Automobile Dealers Associationpricing guide would list its actual cash value at about $22,000.Meanwhile, I have $36,500 of agreed value coverage on my 1960Corvette, for which I pay $212 a year. If I drive it into atelephone pole, I'm guaranteed to get $36,500–once I get out of thehospital.
There are other benefits to collectible policies as well. Someplans include an inflation protection feature that annuallyincreases coverage by $500 to $600 to keep pace with the car'svalue. “Spare parts” coverage is also available. When I wasrestoring my Corvette, I drove to Carlisle, Pa., (where the biggestantique car shows in the East are held) with $8,000 in my pocket tobuy parts. (And I did; I came back with $20!) If someone had brokeninto my trunk while I was having dinner on the way back and stolen$492 worth of bumpers, I would have been covered.
A collectible vehicle policy's coverage is the same as that in astandard auto policy: bodily injury, property damage, medicalpayments, uninsured or underinsured, comprehensive and collision,towing. You can do as much damage with a classic car as any othervehicle, so the coverage should be the same too. People usuallyjust duplicate their standard auto plans, except for thecomprehensive and collision, of course. Premiums almost always runbetween $120 and $250.
Policies have a number of restrictions, but they're generally not aproblem since most collectible car owners are already complyingwith them. Usually, the cars can only be driven to car shows, inparades or for the occasional pleasure ride. Total driving cannotexceed 2,500 (or sometimes 5,000) miles per year. If the car isout, insurers want the owner with it. Cars can't be driven to andfrom work, to the mall, or to show off to a high school buddy twostates away. Each driver in the household must have 10 years'driving experience, so if 17-year-old Johnny wants to the take the'57 T-Bird to the drive-in, that's not permitted by the policy. Thecar also must be kept in a locked garage. Carriers generallyexamine driving records a little more closely than they would fortypical policies.
As might be expected, claims are rare. In over 20 years of writingthis type of insurance, I still have more fingers than claims. Notonly do the policies sell themselves but they service themselvestoo.
Filling out the app is easy. You gather all the typical informationyou would for a standard auto policy. Photos need to be submitted.I photograph all four sides of the car, the engine, the trunk andthe interior. Then comes what I call the fun part: determining thecar's value. Collectible auto policies are all stated value ratherthan ACV, as with regular cars, so an agreement must bereached.
Since I have a background in this, I can usually make an educatedguess of the car's value, but I frequently bring along a littlehelper to make sure. There's a publication called Old Car PriceGuide that comes out every three months. It's similar to aNADA price guide, but it covers antique and muscle cars only. Carsare rated on a 1-to-6 scale, with “1″ representing what are called“trailer queens”–cars that are never driven, and are often inbetter condition than when they left the factory–and “6″representing cars still needing a fair amount of restoration.
Here's how a valuation might work. A client calls about a 1940deluxe two-door convertible Ford, and he wants $45,000 of insuranceon it. He thinks, as we all seem to do about our cars, that it's a“1″ by the book. In my experience, there are probably no “1's” inmy entire four-county area, so I'll definitely bring along the“bible” on this site visit. There, according to the publishedcriteria, I can show him what he actually has is a “2″ and that a1940 Ford in “2″ condition is worth $38,100. There's often somehaggling involved, but ultimately the client and I almost alwaysreach an agreement.
I always personally view and photograph the cars, mainly to savethe trouble of submitting apps that I know will be rejected. Forexample, recently a gentleman called wanting $59,000 coverage onhis 1957 Chevy, allegedly in mint condition. When I looked at itand opened the trunk, I found three holes I could stick my fistthrough.
Clients also need to understand that value is determined by themarket, and not by the amount of work or money invested in avehicle. I had one client with a 1966 Mustang who had $57,000 ofwork done on it, and so he understandably wanted the policy toreflect that expense. I had to explain, however, that 1966 Mustangssimply aren't worth $57,000, and so insurance could not be writtenfor that amount. After all, I could take a 1982 Chevette and pour$30,000 into it, but that doesn't mean I've actually added anyvalue to the car.
This is a difficult thing to discover, but occasionally you'll comeacross “clone” cars. Right now there are more SS Camaros andChevelles out there than Chevy ever made. Someone will take aplain-Jane Camaro and “restore” it by attaching SS emblems andmaybe adding a 396 engine, because big-block cars are worth morethan small-block cars. The changes can be detected, but you have toknow what to look for. On one such vehicle, for example, I was ableto spot where the old shifter used to be on the steering column. Tobe on the safe side, researching the vehicle indentification numberis recommended, since clone cars cannot be insured asoriginals.
To market, to market
Here's my entiremarketing plan for this niche in exhaustive detail: going to carshows and shaking hands. Many classic car owners, particularlythose fairly new to the hobby, either have inadequate insurance oraren't aware of all the options. When I introduce myself, I'malmost always immediately asked for a business card. Owners areeager to talk to me. It's that easy. The coverage is inexpensive,uncomplicated and it's clearly necessary; thus a sale really comesdown to common sense.
As a “car guy” myself I have a degree of credibility that otheragents may not possess, but you'll find that collectible carinsurance is extremely fertile ground regardless of yourbackground. Now, if I lived in a larger metropolitan area–I coverfour counties around Morgantown, W.Va., and we're not exactlywaist-deep in classic automobiles–I might market more aggressively.The potential clients are quite ready to be sold. If it were alwaysthis easy, we'd all be rich!
I normally attend 15 or 20 car shows a year. If an owner isn't nearhis car when I come by, I just slip a brochure on the front seat ifthe window is down, and then I usually get a call within a day ortwo. Now that the weather is warm, I probably get four or five carcalls a week. I frequently get calls from downstate (Charleston,for example), and refer them directly to a carrier or tell them tocontact an independent agent in their area. Since I prefer to viewthe vehicles in person, it's impractical for me to try to dobusiness all over the state.
As a collector myself, I get a kick out of the stories behind someof the cars I cover. The most expensive car that I can recallinsuring is a 1969 Charger RT Hemi-Car, with 21,000 miles. The manwho bought it new still has it today, and it's insured for$88,000–and that's probably underinsured a bit.
Another of my clients has a DeSoto collection, one of which–a pinkone-had been owned by Bruce Willis. I was there when it wasdelivered. As the truck left, the new owner noticed–because I toldhim–that the 14k gold-plated hubcabs (standard on this particularmodel) were not on the vehicle. I've never seen a 60-year-old manrun so fast! When he caught up with the truck, he was informed thatthe hubcabs were wrapped in plastic in the car's trunk.
The pink Cadillac that inspired Aretha Franklin's “Freeway of Love”is owned by one of my clients. Another Cadillac owned by a client,although subsequently sold upon his death, was originally owned byactress Butterfly McQueen. She purchased it as her first car, sothe story went, with her earnings from “Gone With the Wind.”
Accessorizing and upgrading
After working for an agency for 12 years, I started my own fromscratch in 1997. My wife thought I was crazy, and with two kids anda mortgage, I probably was. I figured that if I had nothing else,however, I would have the car people, and they would be my base forgrowing my business. American Collectors, a program administratorthat specializes in this type of coverage, was one of the markets Ihad used, and they played a big part in getting me up and running.I knew how easy writing insurance for collectible cars was, andfigured that one thing would lead to another.
And indeed it did. I enjoy selling collectible vehicle insurancefor its own sake, of course, but here's the real reason for seekingout this type of business: referrals and cross-selling. This nichecan open some doors for you. The typical classic car owner ismature, financially secure and often a business owner. His hobbysuggests a meticulous, careful personality. Collectible carinsurance by itself is not going to get you a summer home on theRiviera, but it's an excellent springboard to selling policies thatmight. In addition to referring you to other classic car owners–andwe all seemingly know one another–your clients may also refer youto other mature, financially secure prospects.
Providing collectible vehicle insurance is a good service for mycustomers. If I've had someone's auto and homeowners insurance for15 years and he buys an antique car, I don't want to tell him,“Sorry, you need to go see another agent.” I'm a firm believer inface-to-face service, and if a client needs something, I want to bethe guy who handles it.
As a client, collector and insurance agent, I'm on all sides ofthis business. It's been fun for me, and it's been profitable. Itcould be for you, too. Specializing in the collectible car nichecan truly be a ticket to ride. Chris Boyles founded HeritageAgency in 1997 and has 22 years' experience as an agent and broker.Heritage provides personal and commercial-lines insurance in theMorgantown, W.Va. area, with a specialty in classic cars.