One of the major benefits of most classic car insurance policies is the fact that the value in the event of a total loss claim is agreed at the outset of the contract.
The benefit of this cannot be understated since, in the event of a total loss, the amount that the insurer will pay you is the agreed value shown on your policy schedule (less any applicable excess on the policy, which can be accommodated within the additional motor legal expenses policy available at £15 plus ipt*).*Price as at 22nd Jan 2015.
With modern cars of monocoque construction, a very badly damaged vehicle may not be allowed to go back on the road (Category ‘A’ as it is known) or is only fit for the reclamation of parts (Category ‘B’).
Vehicles built on a chassis are usually repairable unless totally destroyed/twisted by the intensity of a fire for instance. Category ‘C’ applies when it is uneconomic to repair the vehicle, i.e. the costs exceed the agreed valuation, but it is repairable, while Category ‘D’ is for routine repairs which are covered by the intrinsic value of the vehicle.
As a specialist broker we urge all our clients with classic cars to seek an agreed value – even some new cars such as Morgans or some Mercedes we will agree a value (usually annually rather than every three years, which is our regular review interval).
We can only help our clients if an agreed value is in place. If you do not have an agreed value then, in the event of a partial or total loss, the engineer will have no option but to revert to market value or with rare cars a “guestimation”. A client can always request a change to his/her valuation as a result of improvements made or as a rebuild progresses. Supporting details and fresh photographs signed and dated are, of course, essential.
Requested values for rare high value cars, in particular, need as much evidence as possible in support, often auction sales are the only source or, maybe, the marque club, if there is one.
Finally, the question comes up from time to time when a car has been the subject of a no expense spared restoration with the end value well beyond the price one would expect to pay privately or at auction. In such cases these are discussed with insurers to endeavour to agree a figure that the Insurer is prepared to underwrite, but in such cases it is then the Insurer’s decision.