Why your classic could be under insured
Values are on the move! Make sure that your policy is up to date, so you don’t lose out financially should the unthinkable happen to your classic
Some classic insurers are urging owners to check the values of their vehicles to make sure that they are not under-insured. Insurer Hagerty has told that values have ‘moved on massively’ over the past few years, with an average rise for a Condition 2 vehicle of 13.6 per cent across the market. While that doesn’t tell the full story (many values have peaked and fallen, stayed the same or fallen) Hagerty Price Guide Editor, John Mayhead, advises owners to act now.
He says: ‘Owners should check the value of their vehicle on a regular basis, and we’ve seen values fluctuate significantly over the last five years. If they haven’t checked them recently, they really should. The worst case (if they under-value their cars) is that they may not receive the money they need to replace the car should they have a total loss. ‘Hagerty totally understands how much we invest in our classics and although we can’t replace the time and emotion that we put into them, we would like to make sure that clients receive the financial return they need.’
Emma Airey, Head of RH Specialist vehicle insurance at Hiscox, agrees: ‘Sadly, we still come across cases where owners have let their vehicle values “stagnate”. In other words, they have failed to keep abreast of the current market and update their vehicle’s insured value accordingly.
‘ Values for entry-mid value classics have remained particularly strong and dealers are reporting brisk business activity this year. This could be due to the fact people have taken advantage of mortgage payment holidays or they have more time on their hands (due to lockdown) to hunt for, and acquire, the car of their dreams.
‘ Values for higher value vehicles have seen a slight drop. However, as always, if someone really wants a particular make/model, a seemingly inflated price to some can actually represent great value for money if a unique opportunity to purchase a niche vehicle presents itself.’
Not every insurer has seen the same trend, though. Daniel Clark, Product, Pricing and Underwriting Manager at Adrian Flux, says that owners seem better at keeping on top of their car’s value. He says: ‘I don’t think it’s quite the issue it once was because clients do generally seem more aware. There have been a large number of articles in the press over the years about increases in classic car values, especially around investing in them at a time when it was difficult to make money from more traditional places like bank accounts, investments, etc.
‘ While classic car values have continued to rise over the last few years, recently we have generally seen values cool a little.’
But any owners who are concerned can act quickly to make sure that they are properly insured.
As well as checking against up-todate price guides, John Mayhead from Hagerty says: ‘Speak to your insurer and agree a value. Sometimes the money you’ve put into restoring your classic may be much more than the car is worth.
‘In this case, speak to us as we may be able to offer a policy that covers the cost of reconstituting the car should you have a total loss.’