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MG MGA - INSURANCE in US

I just talked to my AAA insurance agent. He stated that they now offer insurance for classic's for a STATED value and no restrictions such as club events only. I gave him a value of $30,000 and he quoted $500 with 500,000 liabilty $250 deductable. Miles driven to be 3000 miles a year. The policy is now written by AAA and not another insurance group. When I asked him that it seemed a little high$$$, he stated they just started to offer this in Sept 05 and are just getting their feet wet in this market. Anyone have any companies other than Haggerty or Classic Auto that offer us the ability to drive without restrictions.
JEFF BECKER

Jeff, I pay about $150 a year for the same coverage thru American Family Insurance (amfam.com). I don't know if they write policies in California. Limit is 7000 miles per year (they don't seem to check).
John H

Jeff. You might want to read all of the requirments and restrictions for any policy you are considering. I looked at classic insurance, but all of the companies wanted the car stored in a locked garage when not in use. I have covered storage in a secured (fenced and locked) area and this did not qualify. Some of the companies also wanted secured storage when the cars were unattended during club sponsored events. (Such as when a rally ends up at a restaurant and everyone goes in for breakfast or lunch.) I insure my MGs with the same company that handles the rest of my cars and have had no problems with them.

Les
Les Bengtson

What is the problem (if any) with Haggerty? I always thought they were a good acceptable company for classic insurance? Did I miss something?

Thanks,
Christopher
Christopher Wilson

Les,

You must have neglected to mention your gun collection! ;-)

Joe
Joe Cook

Christopher. It depends on whether you define the limitations of the use of your car as a problem or not. I just checked the Haggerty website and their limitations are similar to most other classic car insurance programs. Limited usage (miles per year and what functions the car may be used for) and the requirement that any time the car is not in use it must be in a locked garage.

MGs are my daily drivers. When my wife and I got out to the chamber music series, we take one of my MGs. When I go to the hardware store, I take an MG. About 99% of my driving is in an MG. Hence it cannot be covered by a classic car policy. Some policies require that you have a "primary vehicle which is less than ten years old" when registering a classic car for coverage. Neither my 77 Scout, nor my 80 Bronco are allowed to be my "daily driver" under these policies. Neither is my 95 Miata which my younger daughter drives.

There are a lot of "weasel words" in the limitations of a classic car policy. If I decide to drive to John Twist's Summer Party and, while parked in a motel parking lot, my car is damaged will it be covered? Several of the companies I have spoken with have told me it would not be covered. It was not secured in a locked garage.

I own five MGs. But, I am not a collector. I am a driver and I enjoy working on them as a hobby. Classic car insurance does not allow me to use my property in any manner that I wish to use it. If I work on the brakes of one of my cars, take it for a test drive, have a brake failure and cause an accident, classic car insurance will not cover my liability for that accident. (At least with the company I asked the question of.)

Classic car insurance polices have a number of exceptions to them--areas under which you may not be covered. If one is considering the purchase of classic car insurance, one needs to make sure that it really insures the car. To me, having classic car insurance on a garage kept car, trailered to a car show, makes some sense. For any other use it becomes more probable. I would certainly obtain a copy of the proposed policy, read it carefully, then address, in writing, any questions I might have. I would also want a written reponse to such questions as "If I am involved in an accident while taking my car for a test drive after working on it, would this insurance policy cover my liability were I at fault in the accident?".
If the answer is "No" you are playing bet your house, bank account and everything you own if you take your car out for a test drive.

The price of my regular coverage with my insurance company, USAA, is only slightly more than it would be with one of the classic car insurance companies. And, far more worry free.

Les
Les Bengtson

Jeff,
A word of caution about 'agreed value' policies. Just because you have placed a value on your car and the insurer has taken that value and calculated a premium and taken your money does not mean that they will pay you that amount should you have a claim for the loss of the vehicle if it is destroyed or stolen. If you file a claim their claim adjuster will decide what the vehicle was worth and that is what they will pay. It a good idea to talk with someone who has actually tried to collect on an 'agreed value' policy. It is also a good idea to have several professional appraisals done to establish the fair market value and don't insure for a penny more. You can tell an insurer that your MGA is worth $114,000 like some twit did on eBay recently and the insurer will charge you a premium based on that but they will never pay that on a claim.

Frank
Frank Graham

That is the difference between Stated Value and Agreed Value.

For an Agreed Value policy you have to prove the value up front, which usually requires a professional appraisal. Once the value is agreed upon, the insurer will pay that amount in the event of a total write-off, but not a penny more. Even if there was some inflation, and the car was worth more at the time of claim, they will only pay up to the agreed value. After all, you didn't pay the premium for higher valuee. To keep on top of this may require having the car professionally appraised every couple of years, which is some expense and inconvenience. If you have more than one car insured this way, the problems of regular appraisals are compounded accordingly.

There are policies where you tell the insurer what the car is worth and pay the premium accordingly. That is Stated Value, as you the owner are stating the value. In this case the insurer has no obligation to pay off any more than the actual value of the car, regardless of what you have stated. The advantage of this is that you don't have to pay to get an appraisal done every couple of years. The disadvantage is pretty obvious.

If you do this you should have a pretty good idea of the actual value of the car. You might also want to intentioanlly under-insure it a little to avoid paying too high a premium. Or you might intentionally over-insure it slightly to be sure you're fully covered. If you insure it for 90% of expected value, and the claim amount is smaller, they will pay the full claim. If the car is totaled they would pay the stated value or actual value, whichever is smaller. For a car with moderate value it may well be worth the risk of foregoing 10% of the value in the(hopefuly rare) case of a total write off in order to avoid 10% of the premium payments for your lifetime. It may otherwise be worth paying slightly more to over-insure it as a trade-off against the cost and bother of regular appraisals.

In any case, be sure that you know the difference, and know which policy you are buying.
Barney Gaylord

I also have five cars and use them as daily transport. However I use one, my '67 BGT as a true daily driver and the rest are more occasional. Therefore I cover my GT with a regular 20th Century policy and the rest with classic coverage.

I use Grundy Worldwide for my classic coverage. The reasons I chose them other than one of the best quoted prices are:

- Agreed Value Compensation
- No mileage limits!!!
- Some modifications allowed if declared
- No model or year limitations
- Automatic coverage for 30 days on newly purchased vehicles
- Car is insured when occasionally left outdoors overnight
- Can cover car on foreign trips
- Rates haven't changed in 25 years!

Limitations:
- Must have another vehicle designated as primary vehicle
- Must be kept in a locked garage
- No drivers under a certain age (can't remember exact age)
- "Pleasure driving" only... cannot use vehicle for business or daily errands

http://www.grundy.com/
Steve Simmons

This thread was discussed between 10/01/2006 and 13/01/2006

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