atomic_fungus (atomic_fungus) wrote,

#2313: Insuring your collector's car

I'm not so sure State Farm is at fault, here.

PDB disagrees.

Insuring your ultra-rare-only-forty-of-them-were-ever-made (or "brought to the US", same diff) car means you can't just go to a regular underwriter and say, "Yeah, this car is worth $XYZ, so insure it for that value." At least, a run-of-the-mill insurance plan isn't what you're looking for.

If I am recalling correctly, what you need is agreed value insurance: this is a plan where the underwriter agrees to your valuation of the car (generally confirmed by an appraisor) and underwrites it for that value. It's more expensive than regular car insurance, but if your car is really all that valuable (even if it's just to you) then you pay the freight.

Example: you have a 1969 Mustang Mach 1 with all numbers matching that is in pristine condition, making it a $200,000 car. You'd be an idiot to have regular car insurance on that, because if you experience a loss the underwriter will only care about market value for a car used as transportation. (To make matters worse, usually "market value" refers to trade-in/wholesale value.) In the event of a total loss, you'll get blue book value for a similar car in "excellent condition" because that's the coverage you bought.

You have to decide what level of risk you feel comfortable with. Example: I've got a 1985 Fiero with around 50,000 miles on it. The car is worth somewhere in the neighborhood of $2,000 to $3,000. Do I have it appraised and buy an "agreed value" policy, or do I just go over to my friendly State Farm rep and have him write the same kind of policy as I have on my Jeep? The latter is cheaper but I might not get back the full value of the car should I experience a loss.

There are a shitload of Fieros out there. I might not be able to find one just like this one; but if I were to do with the Fiero what I did with the '95 Escort, it doesn't end up mattering all that much. That's not as easy to manage when you own a car of which there are only 40 American examples.

(My green '95 got wrecked, not my fault; I bought the car for its salvage value of $75 and SF cut me a check for around $2k, which was the market value of my Escort at the time. I used a lot of parts from the green car--including its drivetrain--to fix up the red '95 I bought for $400. Now I have approximately the same car.)

Now: this gomer has an agreed value policy on his car; he doesn't say whom with. The guy who hit his car (and then left) is insured with State Farm. The gomer's problem is stemming from the fact that he refuses to get his insurance company involved.

That is his mistake.

The guy clearly understands how the subrogation process works, because he says to the SF adjuster, "But if the car were to be totaled--which it won't be since my numbers are well under the threshold--they'd pay me $6,000, which they'll come to you for."

Right. His underwriter will go to SF and say, "Your insured cost us $X,000. Pay up."

That's what you're paying them for.

Look: when you buy car insurance, you're making a bet that your car will be damaged. The insurance company is betting you won't. (It's the kind of bet you make where you really don't want to win, but it's still a bet.) They make their money on the fact that--out of a given group of people--only a handful will actually have losses. Some of these losses will be staggering, but not all. Done right, you make money.

Insurance companies have experts who know all the ins and outs of the trade. So your underwriter can go to SF and say, "Look, about this accident that happened such-and-such: your insured was at fault and we sustained a loss of $YY." If there's any argument about it, the two insurance companies will sort it out, and their respective adjusters won't be able to pull any BS because they all know the rules.

But if you're just some guy standing there talking to an adjuster from the insurer for the other guy, WTF do you know? You're not a lawyer. You don't know the law; you're a guy with a sort-of valuable car which is in pieces at the moment. (Besides, you might be lying about your own coverage.) You have no lever to use against the adjuster: the law says all he has to do is make a reasonable settlement offer and if you reject that, you'll be wasting your own time and money trying to get a better deal.

You're a hell of a lot better off going to your underwriter and making a claim.

If you make a claim on your own insurance, it doesn't automatically mean you're at fault. You bought insurance for exactly this situation. "Fault" is determined by the police reports; if your car is sitting in your driveway while you're not home, and some idiot kid has to drive across a hundred yards of grass to slam into it, clearly you're not "at fault".

This guy is upset at State Farm for not appreciating the value of his car, but State Farm is not regarding his car as a collector's item. It regards his car as transportation. Anyone coming from that mindset who sees an admitted POS in the middle of a restoration is going to be surprised it's insured to $6,000 and is going to work from a standpoint of the car being transportation.

State Farm:
Your vehicle was in Poor condition at the time of the accident the interior was stripped the dash was cracked and damaged....Because you were in the process of rebuilding the vehicle we do not owe for what you were going to place in the vehicle, again we owe for the repairing the damage or the actual cash value for the vehicle at the time of the accident.
Owner's statement: "It looks like such a monumental POS, I can understand that."

Sorry, but State Farm is well within its rights, and it's well within the boundaries of legality. It's not even ethically wrong for them to take that stance.

Instead of wasting your time and energy trying to make someone else's insurance company pay, file a claim with your underwriter. The accident still won't be your fault and they will make the other guy's insurance company pay. Will your premiums go up? They might; then they might not. (Mine did not after my '95 was totaled: the accident wasn't my fault.)

The owner posted in the Jalopnik thread, "State Farm has no idea what the car is...." Your own insurer does; that's why you make a claim through them.

Another poster said, "...[H]e should collect from his own insurance policy, assuming he has comp and collision with a collision deductible waiver, and subrogate the claim. It is your insurance company's duty to represent you in a claim."


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