Getting Personal: Tapping into the collector and classic car market

In a slow economy, many agents and business owners are looking for ways to improve or stabilize the proverbial bottom line. Some seek to grow existing business by cross selling and upselling, while others prospect for new clients by adding new or refreshed products. Regardless of the business strategy in place today, there likely is low-hanging fruit in other lines of insurance that can improve business while showing the customer you have their best interests at the top of your mind. One area to consider is the collector and classic car market. Collector car insurance is a $3 billion annual business, with more than 7 million collector cars in the United States. However, nearly 4 million of those cars are insured by a standard policy, which costs the customer 4 to 5 times as much as a collector auto policy and puts agents at risk if a total loss occurs due to actual cash value payment on a standard auto policy. Full-service independent agents can offer a profitable full coverage product for collectible and classic cars. By partnering with a specialty insurance broker in the collector car market, you can provide lower premiums while insuring the full market value of the car. Whether you are considering this coverage for a current client or potential insured, you can leverage the savings they'll realize on the collectible car insurance to maintain or obtain homeowners, standard auto, and other lines of insurance. Car collectors and independent agents alike understand there's a difference between the vehicles you collect and the ones you drive every day. However, not everyone insures his or her collectible and everyday vehicles differently. This disconnect not only leaves collectors in a financial bind if they need to file claims, but could cause an agent to lose business and money if a total loss occurs. Market value vs. cash value
The difference between the two coverages makes the 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 their insurance 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 this scenario, if the customer has a total loss, he or she is out hundreds of thousands of dollars. If the car is insured by collector car insurance, the customer would receive current market value for the collectible auto. The average premium for collector cars is around 4 times less than standard auto coverage, ranging from $150 to $300 per year. Traditional policies typically require coverage equivalent to an owner's primary car, even though the collector car is only driven around 1,000 miles a year. And in a tough economy with fluctuating gas prices, many car collectors are driving their classic cars even less, while some are simply parking their prize possessions to save money. By evaluating unused miles, agents can pass along even more cost savings to the customer with lower rates for lower mileage. A typical collector policy will offer 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 and enthusiasts. The most cost-effective method is to notify your customers of the new offer. You might be surprised at how many customers have the vehicle and simply insure it with another agent. Also try the local car show. Whether you exhibit in a booth, pass out flyers or just mingle with the owners, the word spreads fast among this tight-knit group of hobbyists. Whether collector car insurance gives an agent the ability to provide an enhanced product to full coverage customers or enables the agent to appeal to new customers, car collectors benefit from a lower premium and peace of mind while agents offer more value to their relationships and opportunities to grow businesses. In fact, customers enjoy 60 to 75 percent savings on premiums each year while agents enhance their books of business with new business and renewal commissions, new customer base and cross selling existing customer base. Attend the next local car show and find out how many collectors are low-hanging fruit for your business.