Protecting those prize prossessions

Rough Notes, May 2000 by Zinkewicz, Phil

European insurer offers coverage for classic car collectors

When the classic film Indiscreet was made in London during the 1950s, one of its stars, Cary Grant, insisted that his own Rolls Royce be shipped for use in the picture. In the film, Grant plays a wealthy American in London working for NATO. During his stay, he falls in love with Ingrid Bergman. The love affair is not without complications. After several comic plot twists, brant and bergman finally reconcile their differences and end up living happily ever after.

But the Rolls Royce, certainly expensive by 1950s' standards, would be worth much more today That car, because of its make and the year it was manufactured (aside from the fact that it was owned by Cary Grant), would be considered "vintage." But there are other automobiles, not as old and perhaps not as expensive, whose present-day values might be considerable. And for Emma O'Neill of the London-based Hiscox, those cars represent an insurance market with significant growth potential.

Hiscox underwrites insurance in the Lloyd's of London marketplace as the Hiscox Syndicate and outside the Lloyd's market as the Hiscox Insurance Company Hiscox traces its origin to 1901. It has grown from a single underwriter to an insurance organization that is fully listed on the London Stock Exchange. Hiscox has offices in London, Harrogate, Guernsey, Paris, Munich and Amsterdam. Hiscox writes all marine insurance lines and has specialty niches such as professional liability political risk and credit insurance, reinsurance, energy risks, property and affinity business.

O'Neill specializes in the fine arts insurance area. One division of that department is classic car insurance. "We branched out into the classic car insurance area about 18 months ago," says O'Neill. "In the fine arts department we deal primarily with rich people, and rich people often own at least one or even several classic automobiles. We felt there was a need out there for the right insurance products."

Most of O'Neill's clients are American car collectors, especially many on the West Coast where people "love their cars." Utah is another area of the United States where there are a good many classic car collectors. "We provide coverage for classic cars in storage, cars in transit when they're being taken to shows and physical damage when on the road, but not liability. Liability is a different cover. We do private owners and museums. We've had a single wording policy since 1989. We deal with the large brokers, of course, but we also deal with the smaller retail agents and brokers as well."

According to O'Neill, classic cars usually fall into the pre-1985 category. "Pre-1950 cars are considered vintage," she says. That's in general, of course. Specific makes and models come into play when determining the classification of a "classic" car. According to The Classic Car Club of America, "full classic" cars are defined as "... fine or unusual motor cars which were built between and including the years 1925 to 1948," a much more rigid definition than O'Neill's. Says the Club: "These very special cars are distinguished by their respective fine design, high engineering standards and superior workmanship."

"They were usually quite expensive when new, with relatively low production figures," says the CCAA. "You won't find your mom's 1972 Plymouth Duster or your grandfather's Model A Ford in the ranks of the COCA. We applaud other clubs who do recognize these nonclassic cars and recognize that owning one can be a lot of fun, but they are not what the COCA is all about."

But others say that collectible cars can be broken down into different categories. Teri Olcott, who writes for About.com, says that old cars can be broken down into categories other than classic and vintage, such as "antique," or "milestone." She says that the COCA is an "elite" group which has come up with a list that determines whether a car is classic or not. "The list is very specific as to what makes of each model are given the `classic' definition. For example, any Alfa Romeo, Bentley or Pierce Arrow made between 1925 and 1948 is considered a classic. But only certain BMWs, Buicks and Jaguars made the list."

Olcott points out, however, that there are other clubs besides the CCCA. If a car does not exist on the "classic" list of the CCCA, there is another club that recognizes "milestone" cars. This Californiabased club, called the Milestone Car Society of California, has made up a list that includes all popular and significant cars made between 1945 and 1972.

According to Olcott, a "vintage" car is not just an old car, but one that is a "luxury" car that is in very good condition. It is usually a car from any year at the head of its class.

But these definitions are really only the result of the snobbishness of cliques and clubs. For insurance purposes, an "antique" or "classic" car is one that is at least 15 to 20 years old or older. It must be garaged when not in use, driven less than 2,500 miles per year, depending upon the state, and the owner must have a good driving record and own at least one other vehicle for "regular" use. Therefore, the insurance definition of classic cars covers many more automobiles than do the various "club" lists.