The scoop on Automobile Insurance
At our May 1999 technical session, Ellen Nichols Anderson was kind enough to explain the differences in insurance coverages. Was surprised to learn, I have been utilizing the wrong Insurance Tools on our cars and have moved the insurance coverage to Rally.
Coverage while racing: While involved in timed events, automobile insurance does not cover possible damage to a covered car nor liability for damages to people nor property. Coverage would be extended for driving around the pits, through the staging lanes and on the return road.
ACV or Actual Cash Value is how most automobiles are insured. At the time of loss a value of the car is determined by the blue book or similar pricing system to determine market value then depreciation factors are applied.
This is the wrong insurance to buy, for a collector car. Like using an adjustable wrench to remove an engine it is the wrong tool to use.
For a collector car:
Replacement Value: For new cars only, will repair or replace the car up to the value of a new one.
Stated value Coverage: Be vary careful with this coverage. The insurer has the option to pay the lesser of the amount stated or what is determined to be the actual cash value of your vehicle at the time of the loss. This is not what most folks think they have.
With this coverage after an incident the value of the car may be reestablished after a claim is filed. With depreciation being applied the loss is settled for less than expected. Therefore, the only benefit under a stated amount policy is the value stated or the policy is the starting point for loss settlement.
Agreed Value Coverage: This is the coverage all collectable cars should be insured under. Once an appropriate value is agreed to, in the event of a total loss, the Agreed Value is what is recovered. Value is not reestablished when the loss occurs.
This is like using a full compliment of tools to remove an engine. The results are predictable.
Further Questions: Please be sure to ask the insurance professionals at Rally. Taking to most insurance agents is like taking your Turbo Regal or GS to the local tune up shop for an engine rebuild. They are experts at the bread and butter work, but do not give them a project like this.
President, Rally Insurance Group, Inc.
800 801-1823 ext. 23
630 617-9950 fax