Monday, June 29, 2015

Insurance Qualifications for Classic and Antique Cars

Collecting Antique or Vintage Cars is a passion for some car enthusiasts. Further, these cars command a premium when sold on International markets.

Classic Cars must be insured for protection against damage. However, typical automobile insurance policies are not suitable for reasons mentioned below, and you must subscribe to a specialized Collectible Auto Insurance Policy (‘Collectible Policy’).
  • Rare and unique parts: When rare and unique parts must be replaced, typical auto policies do not pay for the exact match, while a Collectible Policy does.
  • Accidents: When the car is involved in an accident, typical auto policies pay for claims as per their own estimates, while a Collectible Policy settles claims as per the ‘Agreed Value’.
  • Car Shows: When the car is displayed at car shows, either at home or abroad, typical auto policies do not cover accidental damage or theft, whereas collectible policies do.
Typical auto policies are straightforward and simple to comprehend. In contrast, a specialized Collectible Auto Insurance Policy is complex and involves several parameters.

Eligible Types
  • Antiques: 25 years or older; car parts and accessories that closely match equipment available,from the manufacturer;includes Muscle Cars which are 2-door, high performance cars that run on V-8 engines.
  • Modern Classics: 15 to 24 years old; car parts and accessories that closely match equipment available from the manufacturer, typically 2-door vehicles.
  • Exotics: Less than 15 years old, car parts and accessories are rare or limited in production, typically 2-seat cars.
  • Street Rods &Modifieds: 20 years or older, car parts and accessories have been altered to a large extent.
  • Special Interest: Trucks, jeeps, military vehicles and special purpose vehicles that are 25 years or older.
Vehicle Valuation

More than USD 5000 for vehicles that are not modified, and over USD 10000 for exotic and modified vehicles.

Usage Restrictions

The insured vehicle cannot be used for regular driving; commercial or business use, and participation in track events. The vehicle must be used occasionally, for leisure or display at car shows, and must not exceed 5000 miles in a year.

Age Restrictions

In spite of the above definitions for eligible types, some states have their own age restrictions for a car to be eligible for Classic or Collectible Policies. For example, Massachusetts specifies a minimum age of 25 years to qualify a car as Classic or Vintage, while in most states, it is 15 years.

Driver Restrictions

Insurance companies insist that the declared driver for the insured vehicle has an impeccable driving record, and experience in driving these classics.

Storage Restrictions

The car must be stored in a covered, designated and secure car park. Some insurance companies expect the car to be parked in specialized storage facilities designed for such cars.

Agreed Value

The Insurance Company will evaluate your Classic car in line with its current market value, and present condition. In case of damages or theft, the entire amount of the ‘Agreed Value’, is paid to you barring the deductible. Your Policy will also factor the possibility that the classic car may have appreciated over time. You can engage an independent evaluator to evaluate your ‘Classic Car’, at regular intervals of time.

The Classic and Vintage Car show events take place throughout the year, but with the onset of summer, many states in the United States of America, will be hosting antique car events. It is time to check the insurance on your prized possession. 

Your classic car is more than a collector’s item. You have invested significant amount of time, energy and expense on it. Ensure adequate protection for your investment by subscribing to a specialized Collectible Auto Insurance Policy.

Seek the assistance of an Insurance Company who will guide you through various terms, conditions, or qualification parameters, and help choose the right Collectible Auto Insurance Policy for you.

Tuesday, June 16, 2015

Purpose of and Coverage Afforded by Umbrella Insurance

Primary Insurance Policies that cover the insured’s home, car, boat or other personal items, have a coverage limit on liability. This refers to damages you are liable to pay in case of acts due to negligence that occurred, due to your fault (or on your property), which resulted in bodily injury or property damage to one or more individuals. In the last decade or more, lawsuits around such incidents have increased, and in some cases, judges have awarded damages to the tune of 1 million dollars to the victim(s). This puts you at severe risk, considering that your primary policy does not provide coverage for such large amounts. 

Excess Insurance is not the best solution as it is a “follow form” policy that replicates the same policies and coverage as the primary policy, but has higher liability limits.

Liability Insurance or ‘Umbrella Insurance’ is a better solution. Compared to Excess Insurance, Umbrella Insurance has a broader cover and higher liability limit, which is added to the primary policy’s liability limit. For example, if your primary automobile insurance has a cover of USD 300,000, and the Umbrella Insurance has a cover of USD 1 million, your net coverage in case of damages due to an automobile accident is USD 1.3 million.


Umbrella Insurance covers all those items, which have an economic value, or can generate income for the insured in the future.
  • Personal Injury Coverage: This protects you in case of claims made by others for personal injury, or property damage, caused by you or any member of your family, including pets (as in the case of dog bites), for mishaps that occurred on your property. Example: a visitor slips and falls,in your premises
  • Personal Liability Coverage: is for incidents that happened off your premises. Example, while reversing your car, you happened to knock down the neighbor’s pet cat
  • Additional Protection:on top of the primary automobile policy for automobile accidents and liabilities. Example: Your car’s parking lights were not on, and another car crashed into your car
  • Non-business Liabilities: such as slander, libel, false arrest and wrongful eviction
  • Advertiser’s Liability: example- A product or service that you are promoting has flaws which can cause bodily harm or property damage to the user
  • Worldwide Coverage: This covers all the above possibilities when you are outside the United States
  • Employers' Liability: Injuries sustained by your employees, during work hours, at the work premises
  • Aviation Liability: Bodily harm or property damage caused by an aircraft owned by you
  •  Marine Liability: Bodily harm or property damage caused by a yacht/boat/hovercraft  owned by you
  • Liquor Law Liability: You own a bar/pub/restaurant and one of the customers assaults another at your premises. Or he/she drives under the influence of alcohol and causes bodily harm or property damage to another person
  • XCU Liability: XCU stands for Explosion, Collapse and Underground; this coverage is a form of commercial general liability that is applicable when your employee is injured in one of these three situations while at work
Umbrella Insurance covers a wide range of situations, and is very cost-effective. You can increase your cover from USD 1 million to 5 million by paying a premium of USD 200 for the first million and USD 100 for each million thereafter.

Umbrella Insurance fills the gaps in your primary policy and provides additional protection if you stand the risk of being sued. Seek the assistance of your Insurance Company, Financial Advisor or CPA who will guide you through the fine print and help choose the right Umbrella Insurance Policy for you.