Given that most classic & collectible cars spend far more time ensconced in (often custom-designed) garages than they do cruising through traffic, it should come as no surprise that many claims stem from incidents that occurred on the insured's own property.

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

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

“We see a lot of water-damage claims,” adds Richard Standring, a risk services manager at Fireman's Fund Insurance. “When you're dealing 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 cars they will be insuring are garaged. “Policyholders with large, important collections will have storage facilities custom built for this purpose with temperature and humidity controls, special light filters, monitored fire alarms, cameras and motion sensors,” says Standring.

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

Even for much less-exalted collections, most insurers will require vehicles to be kept in a garage—though some policies will make exceptions for carports in Sun Belt areas where garages are rare.

Another common cause of non-driving claims: damages that result from flying rocks when a car is being transported—to a show or a second home. When sending a car overseas, insurers generally prefer it be done by air freight rather than a cargo ship. And for domestic transportation, the ideal is a fully enclosed transport vehicle, not an open-bed truck, says Donald Soss, a vice president in Fireman's Fund Private Wealth group.

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

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

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

“When a customer calls us with a claim, it takes seconds to put them at ease—because they immediately understand we know what we're talking about,” says Drewry. A standard-lines carrier “might be good with a Toyota Camry—but we know what it takes to repair a Chevelle LS6.”

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

“We had a client in Florida who wanted to work with a specialist repair shop in Wisconsin—and we had no qualms with that,” says Jim Fiske, vice president and U.S. marketing manager for Chubb Personal Insurance.

While all the carriers and specialists interviewed by NU stressed they will let clients use the repair shops they are most comfortable with, Hagerty has a unique twist: The company will pay their insureds an hourly wage if they do the repairs themselves.

Special Reports /

Fires & Floods Are Common Causes of Classic Car Claims (Stampeding Horses, Less So)

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