Calling your insurance company to report an accident or damage or theft to your hot rod is never a good experience-and it's worse if you're making the call from the side of the road hundreds of miles from home. Unfortunately, nobody is immune from bad luck. But there are a few things you can do to make that dreaded phone call a little less painful.
This magazine, and every other hot rodding mag out there, has covered the ins and outs of specialty auto insurance many times. This time, we're focusing our attention on some specific circumstances surrounding trailered cars. Yeah, we've sneered at "trailer queens" in the past and probably will in the future, but the reality is that there are good reasons and proper occasions for hauling that hot rod behind a tow vehicle. What we want to talk about today is how trailering your hot rod can affect your insurance coverage.
We started by thinking up as many different potential situations as we could involving hot rods, trailers, and accidents. Then we got on the phone with representatives from some of the bigger and better-known insurance companies to ask them how they would respond to our dreamed-up scenarios. Some of our hypothetical situations were fairly common and some were out of the ordinary-but it's those out-of-the-ordinary episodes that you've got to be prepared for. You can never know ahead of time if you'll need to rely on your insurance coverage, but you should know ahead of time if you can rely on it.
There are a bunch of specialty automotive insurance companies and each one has its own specific rules regarding coverage. We stuck to three of the companies that have been around a long time and earned good reputations. Hagerty and Grundy specialize in hot rods and other types of classic cars; State Farm is relatively new when it comes to hot rod coverage but has been in the auto insurance business for 87 years.
The Fundamentals
Before diving into some of the specifics of trailer issues, let's talk one more time about what type of insurance you should have on your hot rod. An "Agreed Value" policy is the best choice for a hot rod of any value. As the name suggests, "Agreed Value" policies will pay the amount agreed on by the car owner and the insurance company in the event of a total loss or the full cost of repair up to that amount. Keep in mind that agreement might require some mutual compromise between you and the insurance company. You can improve your side of the argument with photographs, receipts, and if necessary, an honest appraisal by an impartial third party. The agreed value may not be as high as the sum of all your receipts or the sentimental value of the car, but it's the best way to protect the investment you have in your car and guarantee you will collect the full amount you expect, with no haggling and no surprises.
Don't confuse "Agreed Value" with a "Stated Value" policy. In the event of a loss, a "Stated Value" policy will pay either cost to repair the car, the value stated in the policy, or the cash value of the car (what the insurance company thinks the car is worth), whichever is less.
Hopefully we don't need to tell you not to just add your hot rod onto the ordinary auto policy you already have for your daily-driver, work truck, and family minivan. It might sound like a money-saving deal, but that type of policy is designed for cars that will depreciate in value. In the event of an accident or loss, the value will be determined by the insurance company.
These distinctions have to do with how much your car is covered for. The other consideration is what your car is covered for. As with an ordinary auto insurance policy, you have coverage options for collision, comprehensive (any damage or loss that is not collision-related, such as a fire or theft), and liability (protection in the event of causing damage to another person or their property).
Trailer Hitches
All specialty car insurance comes with conditions restricting driving. Typically, protected uses include driving to car shows, road trips, cruises, parades, and other hobby-oriented activities. Prohibited activities typically include non-hobby activities such as commuting to work or school and using the car to run errands.
We wanted to find out how various trailering scenarios would fit within the rules of allowed uses. So we contacted Kip Diggs at State Farm, Chuck Wasoski from Grundy Worldwide, and McKeel Hagerty of Hagerty Insurance with our long list of questions and hypothetical scenarios. Some of them are drawn from actual incidents we'd heard about in the past, and all of them possible. As you'd expect, each company's answers differed, but they were all fairly consistent.