Tips and advice
Classic Car insurance myths
Insurance is necessary, but it needn’t be a
pain. There are however many common misconceptions which can trip
up the unwary. Bear these important points in mind when
you’re buying classic insurance:
When agreed value isn't
It’s common for classic car policies to agree a value at the
outset rather than at the time of a claim. If there’s a claim
later on then it can avoid any arguments over payout
amounts. This agreement can be null and void, however, if
you’ve not been honest with yourself (or the insurer) as to the
car’s condition on your proposal form. If it turns out to be
condition 2 when you’ve said its mint, then you’ll only get what
the insurer thinks its worth, despite it being ‘agreed’. And
remember, agreed value doesn’t mean you’ll get more for your
classic than it’s actually worth - your assessment should be
based on market value.
Why modifications must be declared
Many used cars these days have been modified in some way and
insurers generally take a sympathetic line on
these. Unfortunately many people fail to declare a
modification, which means the policy can be invalidated.
Replacement alloy wheels are a good example of this. For
example, by changing your 1972 MGB 1798cc engine for a 1950cc lump,
it could mean no cover on the whole car unless you tell your
insurer. Or if you add twin carbs to your Triumph
Herald. If in doubt, declare it.
Why you're not covered driving someone else's car
Some policies have an extension entitled Driving Other Cars.
Don’t get caught out by thinking it covers you to drive any car
with ‘comprehensive’ cover. It gives Third Party Only cover,
which means just that. Damage to third parties is covered but
not to the car you’re driving. Most classic car policies
exclude it altogether, so if you borrow a mate’s car, park it up
and it gets stolen, there’s no cover.
Why bending the truth will bite you back
One of the reasons Classic insurance is cheaper is policyholders
must usually be over 25 years of age. Saying your 17 year old
is an occasional driver when they are in fact the main user, or
choosing to overlook that accident a couple of years back is not a
good idea. These are called ‘Material Facts’ and because
insurance policies rely on honesty, or ‘Utmost Good Faith’, they
expect you to be completely straight from the outset. If these
conditions are breached the insurer has the right to invalidate the
policy.
Why a policy "warranty" is so important to comply with
A Warranty on an insurance policy is something that must be
complied with to the letter. If it isn’t then the policy is
invalid. Insurers price policies based on all the factors they
know about and attach warranties to keep the risk down. A
common warranty that some insurers use for expensive classics is
the restriction of theft cover if the car is not kept in a garage
at night. Breaching this will mean the car isn’t insured and
no amount of excuses will change that if it’s stolen.
Why excesses matter
You may find that there’s a compulsory excess to go with the
voluntary one you’ve just taken in order to get a discount - and
it’s not always pointed out. That could be painful. Also
look for the different types of excess; the most common is an
“accidental damage” excess which is applied to damage to your own
car, you paying the first £X of any claim. There’s also the
Fire and Theft Excess, which is exactly what it says. The most
pernicious is the “all sections” excess which means you’ll be
paying the first £X towards damage you do to someone else,
too. This is quite rare on good quality policies but common
on the cheaper ones. Beware!
Why occupations make a difference to premiums
Many people fail to see why being a footballer is any different
to being a sports teacher, but insurers are only too
aware. While both professions do basically the same thing and
the damage claims to the cars aren’t too different, the main reason
for insurers getting the wobblies about footballers and actors is
the fact they have famous friends. That means if a pro takes
Beckham, Giggs and Owen for a spin and crashes and injures them, a
multi million pound liability claim won’t be far away.
Why an insurance broker is different from an insurance
company
Many people get these two confused, but they couldn’t be more
different. An insurance company is the firm that actually
takes on (writes) your risk. They are the ones that pay out if
you have a claim. A broker is an agent for the insurance
company, but will not actually pay your claim. They will,
however, be able to give advice as to the best insurance company to
place your classic with - dealing direct with the insurer
gives you access to only their product.
Steps to your dream car
1. Be sure of what you want. Research the model that’s best
for you and check it fits in your garage too. Look at the
contemporary road tests to confirm mpg and servicing. Note
that price guides are notoriously inaccurate at this level.
2. Pay particular attention to the colour and specification and
get the opinion of at least a couple of specialists in the
marque. A wrong choice can lose you thousands.
3. When you know what you want, look at the ads in Classic Cars
for Sale and other relevant trader mags over a period of a month to
get the feel of prices. Look at the price of cars a couple of
years older to get the feel of depreciation levels.
4. Unless the car you want is under three years old, it makes
sense to buy from a specialist or franchised dealer with a quality
warranty to back it up. It will cost more up front, but less
in the long run.
5. Be patient and wait for the right car to come up - don’t
accept second best at this level as it will cost you dearly.
Your every move must be carefully planned and executed.
6. Make a shortlist of suitable cars and view them on different
days. This way you have time to consider and digest what you
have seen.
7. When you find a car that suits, demand a test drive covering
at least an hour and in all the conditions you will drive the car
in should you buy, such as heavy traffic, motorways etc.
8. Whilst at the dealer, stay detached and don’t let the glamour
go to your head. Remember; when you’ve had it a few months the
novelty will wear off, so look at the everyday implications.
9. Beware finance deals with a large balloon payment at the
end. The market in supercars is fickle and you don’t want to
be left with large amounts of negative equity.
10. Don’t buy thinking you can use a car like this every
day. Even if you think you can get away with it with the
journeys you make, mileage will kill the value and wear the smile
off your face very quickly!