I learned an important lesson this morning and wanted to pass it along to anyone else who has classic car insurance with agreed-value coverage.
As some of you may recall, last fall my '69 Corvette had an electrical fire. The insurance company (American Collectors), after 2 of their investigator/appraisers came out, decided to repair it rather than total it.
Recently, the restoration shop submitted their final supplemental bill to the insurance company. Only painting of the front clip, minor reassembly, and detailing remain to be done. However, that final supplemental bill brought the repair total over the threshold for the insurance company to total the car. My agreed-value policy has the car at $32,500. Their threshold to declare it a total loss is $24,712. The repair bill total was $27,673.
The choice they gave me was this:
Option 1 - If I wanted to keep the car, they’d pay me the agreed value minus the salvage value and brand the car with a salvage title. I would keep the car but it’s value would be lowered and, depending on the salvage value, I could be out of pocket after paying the repair bill.
Option 2 - If I didn’t want to keep the car, they’d pay me the agreed value but I’d be left with no car and about $5K, after the shop bill was paid.
Either way, their policy allows them to wait until the car is practically done to decide to total it, leaving their insured with unacceptable choices and taking most of the loss their insurance was supposed to protect against.
I believe this could happen with any insurer but I recommend that everyone find out if their insurer can change the decision to repair at the 11th hour and after tens of thousands of dollars of repair bills have been run up.
Fortunately, the shop is as opposed to a salvage title as I and they are going to reduce their total bill (to the insurance company) to keep it under the threshold for a total loss determination. We may end up owing them something in the end but it’s likely to be a lot less than the value hit of a salvage title and I’ll still have a virtually new 1969 Corvette with a clean title.
Should I ever find myself in a situation like this again, the lesson is to not allow any work to start until the damage is fully and completely evaluated and a not-to-exceed number is established. Failing that, if the damage is anywhere within spitting distance of a total loss, I’ll insist on that from the start.
As it happens, my insurance was due to renew this month anyway. I’m now with Grundy through a local agent that has all our other policies.
