A Different Breed: Best Claims Practices for Collector Cars

When it comes to claims, collector cars require special expertise.

If you’re an automobile aficionado, you’ll likely know the difference between a 1967 Pontiac GTO and a 1967 Plymouth Barracuda. The horsepower, the torque, the available engine sizes, the number of barrels in the carburetor and zero-to-60 MPH times are some of the things that separate these two highly sought after machines.

The same is true when it comes to settling automobile claims. And that’s just for modern vehicles. Adjusting a claim for a classic car – say, a 1942 Packard – is an entirely different animal.

Without knowing the subtle nuances between handling claims on a collector car versus a standard auto, some insurance adjusters can seriously botch collector car claims. Customers expect their insurer to offer comprehensive coverage in case of an accident, and it’s the insurer’s responsibility to ensure a reputable and seasoned adjuster who understands this niche market is a part of that coverage.

The Expert Within

Many collector cars require a complex approach to repairs. This is due to a variety of factors, including potentially high costs of parts and labor and trying to find appropriate parts.

Restoration and the cost of materials isn’t the only issue. Handling the emotions of disheartened customers, who have just witnessed one of their most prized possessions incur substantial damage, is also crucial. Without impeccable customer service skills, the game of rebuilding and repairing a collector car could be over in a flash.

There are many aspects of collector car claims that are similar to regular auto claims. First off, the accident needs to be promptly reported, and the insurer needs to gather facts around how the incident occurred and explain the claim process to the customer. As always, the company will then assess the damage, which includes deciding whether or not the vehicle is a total loss. In all but the smallest of damage claims, someone will be assigned to physically inspect the vehicle.

An agreement on the scope and cost of repairs will be completed and will form the basis for the payment made by the company.

The next step is to evaluate and inspect if, and how, the vehicle can be repaired. Unlike regular modern automobiles, there is no readily accessible database containing parts lists, parts pricing, labor associated with parts replacement and painting for most collector vehicles. This means that it is up to the damage appraiser and the repairer to reach a mutual agreement based on knowledge and expertise, through negotiation on many of these things.

A Team Approach

Meanwhile, as the insurance company moves through its claim processes, it’s vital that the adjuster keep the customer in the loop. Not only should the customer understand the policy and the coverages provided, but they should also have a say in who they would like to use to repair the vehicle. Typically, it will be someone who has either assisted in the previous restoration of the vehicle or who has an existing relationship with the owner. If the owner is not familiar with any repairers, the insurance company should assist in identifying possible options.

On the other side, the repairer should also have some familiarity with the type of vehicle. While a regular collision shop can certainly repair a collector vehicle, it may not be aware of all the distinctions associated with a particular brand and model. In fact, in some cases, the vehicle owner may have some parts available that could be utilized, and should be compensated for using these parts.

For some vehicles such as certain 1950s or 1960s American or British cars, parts may be relatively easy to find. They might be “NOS” (new old stock), newly made replacement pieces or even used parts.

Sometimes, collector cars must be sent to specialized repair facilities. Typically, in some cars from the 1920s and 1930s, there are no parts readily available so they will need to be fabricated by hand. These are typically done on a time and material basis and can be extremely costly. Chubb once spent more than $30,000 to build a set of bumpers for a rare 1930s French vehicle.

It’s not unusual for repairs on rare cars to take years. In these situations, the damage appraiser should visit the repairer throughout the life of the job, checking on progress, negotiating prices and photographing repairs. It is important that the vehicle owner has faith in their insurer to stick with the claim for the long-haul.

Additionally, on a major job, it would be rare for the initial damage estimate agreed to by both the damage appraiser and repairer to be the final cost. Often times, there may be a number of smaller follow-up issues such as panel adjustments.

Paint matching can also add a dimension of considerable complexity to the repair. With modern vehicles, new technologies and paint matching systems have all but eliminated this as an issue. With collector vehicles, that is not the case.

In some cases, the paint material type (lacquer vs. enamels as an example) may no longer be available; it may be quite old and difficult to match in both color and shine. For example, modern urethane paints are much shinier than paints used in the past and may not be appropriate for an accurate restoration.

Agreed Value

Some statistics indicate that fewer than half of the collector vehicles on the road today are insured by collector programs. This vies poorly for the fate of damaged collector cars, but fares even worse for cars that are total losses.

Generally, if a vehicle is totaled and the owner has collector car insurance, there will be an agreed value on the vehicle at the time the policy is written. Although the insurance policy may grant the salvage rights to the company, many collector vehicle owners desire to retain the salvage, which is negotiable in terms of how much would be deducted from the settlement amount.