Q: Is coverage available for a newly purchased, complete (or mostly complete) hot rod being trailered from the place of purchase to my home or shop?
McKeel Hagerty assured us that as long as the new owner places coverage on the vehicle prior to transport or delivery, that vehicle would be protected under his policy while in transport. Wasoski said that Grundy provides 14-day automatic coverage to its customers on newly purchased vehicles. As you probably guessed, that applies to existing customers-not to people who intend to become customers.
Q: What if the newly purchased car was purchased in unfinished condition or as an assortment of disassembled parts? Is it still covered during transport?
Hagerty Insurance does cover vehicles under restoration and offers additional coverage for spare parts for any collector vehicle for an additional premium. The same applies with Grundy. Wasoski told us that many hot rodders make the mistake of neglecting to insure a project car before it's finished and risk losing their investment if there's a fire or theft. Many rodders assume that an unassembled or partially assembled vehicle in their garage is protected by their homeowner's policy, only to find out it isn't when trouble occurs. State Farm, Diggs informed us, would definitely cover a licensed and already-insured vehicle that had been driven and was undergoing upgrades or a rebuild, but probably would not cover an incomplete vehicle that they didn't have a policy on prior to tearing it apart.
Q: Am I covered when trailering an in-progress project car from one shop to another, such as from the body shop to the paint shop?
Hagerty, Grundy, and State Farm all confirmed that the protection would remain on the car in those situations. State Farm told us that those scenarios could be considered maintenance or upkeep of the vehicle and would be covered. Diggs went on to talk about protection if a car is damaged or stolen while at another shop. Although he said it's a case-by-case basis, and many shops display signs claiming no responsibility, businesses are expected to provide "reasonable care," and the insurance company could cover your loss and turn around and try to recover your deductible and the insurance company's payout.
Q: What if my finished hot rod is damaged on the trailer while on the road?
The companies we talked with would cover the damage to the hot rod. If the damage was the result of a collision, the protection would be provided by the collision coverage in your policy, if not by the insurance of the other driver. If the damage was caused in some other way-such as a fire in the trailer, vandalism, something falling on the car, or the trailer tipping over or rolling off the road-the protection would probably be provided by comprehensive coverage, just like it would be if the damage occurred at home. The answer here is to make sure you're covered enough with collision and comprehensive.
Q: Does coverage change if the hot rod is damaged as a result of rolling off the trailer, or if the trailer and car become unhitched from the tow vehicle?
We were trying to think like lawyers here, sniffing out potential insurance company loopholes, but State Farm, Grundy, and Hagerty assured us that a full-coverage policy on the car involved would apply and would pay for any collision or comprehensive damages to the car in those situations.
Q: Does it affect coverage if the trailer is not the property of the car owner-such as a rented or borrowed trailer, or if it's an open trailer or closed trailer?
That was our "gotcha" question, but the answer is no. According to Hagerty, if coverage is in place on the vehicle inside the trailer, regardless of the ownership or type of trailer, any collision or comprehensive damage to that vehicle is covered.
Q: Is it necessary to have separate insurance coverage for the trailer?
Insuring the trailer is separate business from insuring the car. The trailer must be insured in order to be covered for any physical damage to the trailer or liability caused by it; the trailer wouldn't be covered by the hot rod policy. The companies we talked with may be able to provide trailer insurance for their customers in addition to the collector car policy.
Obviously, insuring the tow vehicle is also a separate deal. In the majority of cases, the tow vehicle is not a classic or specialty vehicle and would be insured with an ordinary actual cash value type of policy, just like you'd have on your daily-driver. Liability insurance on the tow vehicle would likely cover property damage or personal injury caused by the trailer while it's being towed.
Q: What if the tow vehicle is a classic or specialty vehicle?
We saw this scenario a lot at Bonneville, where teams would use a classic truck as a tow and support vehicle. Since that type of vehicle would not comply with the use restrictions of most specialty car insurance companies, it would be tough to get it covered with an "Agreed Value" policy. Even though it might have a high value, it would probably need to be insured with a traditional auto policy.
All of the insurance company reps we spoke with were glad to talk to us and didn't mind answering all our picky questions. If you are unclear about your insurance coverage, do what we did: call up your insurance company and bug them with questions until you understand what's covered and what isn't. Assume nothing, and make sure that everything you're told is backed up in writing in your policy.
An insurance policy is a piece of paper handed to you when you pay. Kip Diggs at State Farm describes it as a promise that says that when something happens to your vehicle, the insurance company will take care of it. Words spoken over the phone-or written in a magazine-won't protect the investment you have in your hot rod. That piece of paper is the only thing that will. It's better to find out what is and isn't covered now instead of out there on the side of the road.