Eric and I corresponded with the owner of a ’67 Beetle which had been wrecked. The owner immediately had contacted his insurance agent who sent an adjuster to view the damaged vehicle. The result was a declaration of a “total loss” with an offer of a small dollar amount for the depreciated vehicle. With reason—the owner was incensed. He knew that his car had value. He argued with the insurance company—to no avail.
Our Beetles fall into a class of vehicles known as “Classics” or “Collector Automobiles”. Their value cannot be ascertained by going to the Kelly Blue Book or to some other commonly know valuation chart.
Since this is true, insuring one’s vintage vehicle requires study before implementation.
When a person decides to insure his vintage Beetle with a “regular” insurer, he finds that the vehicle falls under the rules of the game for any other vehicle on the road. He may apply Collision, Comprehensive and Liability Insurance. But the dawn explodes when it comes time to file a claim.
The Insurer will send a claim adjuster to view the damaged car. The adjuster is used to assessing damage and applying the normal rules of a claim upon cars. As in the real-life example above, some have discovered, to their horror, that this type of insurance claim is going to adjust according to a value which the Insurer will unilaterally apply. Suddenly, you find your vintage Beetle’s pre-accident worth only a shadow of what you thought.
Your vehicle for which you paid THOUSANDS! How can this be?
The mistake was in not insuring the Beetle with a Collector or Vintage Insurer—a company which specializes in vintage vehicles. Such insurance is determined by a careful assessment of the vehicle based upon its age and value on the collector market—not as a household or business vehicle which has a calculated annual depreciation value plus condition.
Vintage Vehicle Insurers provide State-required insurance–and much more. Not only will your vehicle be protected against liabilities (claims presented by other parties of personal and/or property damages), but also its own inherent value will be protected by a “stated” or “agreed-upon” valuation. This is a process in which you, the owner, play an all-important part!
The agreed-upon valuation will depend upon your doing some homework. There are numerous helps for assessing the value of a car. But, before you look at any of these resources, know your Beetle! Do not leave this in the hands of another.
Know Your Beetle:
Hopefully you have kept your Bill of Sale so that you have that to reference your initial outlay.
Now, you need to look at what you have done to the car, if anything. Most of us will fit into this situation—we’ve spent money to up-grade the vehicle to road-worthiness. We may have sent the car to a shop for significant repairs or even for its restoration. Receipts for any and everything MUST be kept. These all go towards assessing an insurance value to your car! I keep a folder on each of my antique vehicles. All receipts and notes of up-grades can be found at a moment’s notice.
If you have installed accessories, these should be itemized. If you have made modifications, these also must be detailed. Even spare parts should be tallied. I have a fair-sized inventory for my two Volkswagens. This has been added to the over-all insurance quote which I obtained from my Insurer.
Learn what it would cost to replace your vehicle with one in similar condition. This can be an eye-opener. You may have spent $12K to put your vehicle into its condition. Now, when you look at the market, you may not be able to locate a car in the same condition for the dollar amount you would be paid should your vehicle suffer complete loss. Do not under-insure your Beetle.
The Insurer will want to know how you intend to use your Beetle. There are some common restrictions with all Collector Insurers, although there may be some minor differences among Insurers.
The Insurer will want to know, also, whether or not you have a daily use vehicle—this goes to the restrictions for driving a collector car. And, how the vehicle is going to be regularly stored is of great importance for how your car is going to be insured. You may also be asked how far from the sea coast you live—as I was.
Once you know your car, you can discuss insurance with the company of your choice. Your Insurer may want to increase the value which you have chosen, or to lower it, due to some factor(s) which you have not taken into account.
Once covered by collector insurance, your car now is not subject to the normal adjustment claims applied to your family Honda or other utilitarian vehicle.
While we are talking about insuring your vehicle, let’s talk about special situations. Let’s say that you have put your car into a shop where it will undergo a partial or even a full restoration. Your insurer will explain how you can apply a special rider while the Beetle is in the shop. A repair or restoration shop probably has some sort of insurance, but it usually is not sufficient to cover total vehicular damages. Especially should you look into an insurance rider if your Beetle is going to be long-term in a shop.
The bottom line here is to make a studied effort when assessing an insurance value for your car.
When your policy comes up for renewal each year, reassess the insurance value of your car. Do not become lax. Our cars are accruing in value, fortunately. During some years, more–some years, not as much. Also, some models accrue more value more rapidly than do others.
Know your Beetle!
A common mistake which we all fall into is confusing insurance value with sales value. The two are not the same. They aren’t even cousins, in most cases.
There are numerous factors which should be considered when figuring insurance value. One of these is auction values. We really get hyped when we see auction prices, don’t we! However, auction values constitute a very small percentage of the pie when an insurance value is being calculated.
Auction prices vary greatly due to many factors. Sometimes when the hammer falls at the auction block the price doesn’t reflect reality because bidders engaged in a war to see who would acquire a car. A friend who auctioned his ’67 Beetle here in Dallas laughingly told me that two men engaged in such a battle for his car. He was loving it! Afterwards, one of the men said…”I was not going to let that other guy get this car!”
And just the opposite may happen—an off day at the auction may see cars selling for well under their intrinsic value.
So do not equate auction prices directly to insurance values.
A car’s sale value is driven by what people are willing to pay. I watch auctions and other sales venues for 1967 Beetles. By comparing conditions of vehicles, I usually can arrive at an “average” value for a particular model.
It is a common but true axiom that the most economical way to own a restored Beetle is to purchase one from someone who has restored it. This is because it almost always costs much, much more to restore a vehicle than it is worth. Insurance worth often has little to do with the restoration price.
Most of us have a feeling that we should be able to sell our restored Beetle and retrieve, at the very least, what we have in the vehicle. Sadly, this almost never is the case. I see case after case of sellers asking outrageous prices for their vehicles based upon restoration or modification costs. These vehicles usually sell for many thousands less, if they sell at all.
Restoration should be based upon a personal desire—not upon what the car will sell for on the open market.
I suggest studying sales venues such as thesamba.com, eBay, oldbug.com, Craigslist, and other OnLine venues.
Search for vehicles in approximately the same condition as yours. Take note of many such vehicles. Then, arrive at an “average price”. This “average price” more than likely is going to be a fair market value which will help when establishing an insurance value for your Beetle. Caution: Remember that advertisers commonly “puff” their ads. Be perceptive when assessing cars. A lovely paint job may turn your eyes from what’s under the decklid or the condition of the underside of the vehicle.
As an example, from a well-known Insurer, look at the valuation method offered by Hagerty’s Collector Car Insurance.
Find your Beetle on the chart by following the simple steps.
A Collector Car Insurance Expert told me that “…fewer than 1% of all vintage vehicles will be in the “Concours” category—especially when we are talking about Model Ts and Volkswagen Beetles”. “Concours” judging, which hasn’t happened yet for Volkswagens, requires that there isn’t even a spec of dirt anywhere on the vehicle and that EVERYTHING is correct.
I must tell you that I do not yet see the values which even this carefully planned charting method (above) exhibits. Reality drives the market and reality cannot be fitted rigidly into any charting method or mold.
What sellers are asking, or receiving, often bears no resemblance to reality. Reality is when hard, cold cash transfers hands.
An important aspect of insuring your Beetle is knowing your policy and following the instructions which your Insurer specifies. I carry not only my Insurance Cards in my VWs—I also carry the Hot Line Number in case I need help or an answer in a hurry.
Here’s an example of knowing one’s policy: In case I become stranded, the first thing I am asked to do is to call the Insurer. I am not supposed to resort to “self-help”—say, in the case of needing a tow. In my instance, I am to wait until my Insurer sends a flatbed towing vehicle.
Don’t void your policy by not following the instructions which it specifies!
To sum things: Be pro-active when insuring your Beetle. Once you have chosen an
Insurer, spend time discussing your vehicle with an Agent. Leave nothing to chance.
Establish a working relationship with your Agent. If there is something which you do not understand, ask questions. Be up front with information about yourself, your Beetle, your living conditions and how the car is to be used.
And, remember—you can contact your Insurer during the year with questions or changes to your policy. You are paying for a service—use it wisely!
Now—go and drive safely—and insured!