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Classic cars are all the rage in Canada at the moment. Once a niche market for specialty brokers, the collector car industry has now turned into big business in the insurance world.
As knowledge about classic car insurance grows, more and more collectors are turning to insurers like Hagerty to keep their favourite pastimes covered.
A collector car is a vehicle that can hold its value or appreciate over time, according to James LaClair, vice president of Hagerty Canada.
“Hagerty’s collector car insurance policies run on an agreed value system,” LaClair told Insurance Business. “When we write the policy, we will agree upon a total value given to us by the owner. In the event of a total loss to that vehicle, there will not be any negotiation over the pay-out.
“If there are any concerns about the value of the vehicle, we have people who can go out and make an assessment. Because we write this agreed coverage, we really need to have confidence in the value of the car.”
But some classic cars, collectors may argue, are invaluable. Writing a policy for a one-of-a-kind vehicle is not an easy task. It requires research, patience and expertise.
“It takes a lot of experience to sort the correct policy for a really special car,” said LaClair. “We spend a lot of our time at auctions to see what’s hot in the market and what sort of price vehicles are being traded for.
“Some cars change hands every year or so and this makes it a bit more difficult to assess their true value. At the other end, you might come across a vintage racing Ferrari, which featured in a famous race with a famous driver - with that you can be looking at millions of dollars.”
The average annual classic car policy at Hagerty is about $400 – less than most standard auto policies. Premiums are cheaper because the risk is generally lower and the expectations of use are different.
Collector car policies often only cover the vehicle for pleasure-use and not for regular commuting or errand running. The most common claims come from what LaClair described as “everyday fender benders” – things like minor bumps and scratches. He commented: “These are older cars. They don’t stop as fast or turn as well, so we have to deal with lots of little bumps.”
Classic cars are not just loved by nostalgia-hunters. The insurance market has seen a surge in the number of younger drivers looking for coverage.
“Younger drivers’ reasons for collecting classic cars are different. It’s less about nostalgia and it’s driven more by a need for analogue,” LaClair said.
He added: “It’s a bit like the craft beer revolution and people collecting vinyl records. Young people have grown up in a digitally saturated environment and collecting classic cars is a cool way to escape from that.”
