How Much is Enough?Hot rodders frequently make the mistake of underinsuring their car, based on the premise that since they don't drive it that much, they can get away with lower coverage. The other frequent mistake is overvaluing the car, based on wishful thinking, a mountain of receipts from various parts manufacturers and build shops, and cars they've seen in the media (what one insurance company rep called "the Barrett Jackson effect").
When it comes to agreed value insurance, you should insure your car for an honest estimate of current market value. You should also remember to update your coverage regularly if you continue to modify and upgrade your car. That doesn't mean every time you replace the brake shoes or buy new tires, but if you paint it, swap engines, or redo the interior, call your agent. And keep your eye on changing trends in the hot rod market so your rod doesn't become undervalued. Re-evaluate your rod's value every time you renew your policy.
Physical damage coverage levels will depend on your car and your personal habits. If your rod is an owner-built, low-buck, low-tech rod, you can go lower on physical damage coverage since parts won't be as expensive and you will be performing most of the repairs yourself.
When it comes to liability coverage, you would be smart to carry the highest limit you can afford. Most representatives we talked to recommended carrying the same liability limits on your rod as you do on your everyday driver. If you happen to have umbrella liability insurance, it is important that the level of your auto insurance reaches the lower level of the umbrella policy; otherwise you could find yourself financially responsible for the gap between your auto policy and the umbrella policy.
Starting EarlyAnother important issue rodders often overlook is insuring their cars during the buildup. Don't assume that your homeowner's policy or a rod shop's insurance covers your project car. One agent we spoke to recommended getting insurance as soon as you start assembling parts. Not all insurance companies will insure a car until it is running and fully legal, but others do offer agreed value comprehensive policies to insure incomplete cars in the case of a garage fire, theft, vandalism, or if something happened while trailering the car to a shop.
A similar situation would be when a finished rod goes back into your garage or a pro shop for a rebuild or for upgrades. Call your agent to find out whether or not your coverage remains in effect while your car is in a shop for an extended period of time. If so, you may be able to switch to a comprehensive-only policy. Some companies will cover your project only if all parts remain in the owner's care. Others will cover it even if it is at a shop or being trailered from one shop to another.
Since hot rodders buy and sell cars more frequently than non-enthusiasts, Aon now offers a provision for newly acquired cars. If one of their customers buys a car at a show, that car is automatically covered while the new owner brings the car home.
Joe Daily DriverStop the article! Sorry guys, but how about insurance advice for somebody like me? I've got one car. It's a hot rod, it's homebuilt, and it's a daily driver. I drive it to the job Monday through Friday, and to local rod runs or out to the lake on the weekend. Where do I get insurance?