Collector cars-a classy niche

Rough Notes, Oct 2003 by O'Hare, Edward

Aon program revs up hobby while giving agents keys to cross-selling opportunities

In the movie "Rain Man" Tom Cruise plays Charlie Babbitt, a cynical, fast-talking dealer in collector cars. But it's not the Lamborghinis and Ferraris that turn him on. His car of choice, one he has coveted his whole life, is one he couldn't drive until his father died and left it to him in his will. Staring at the car with soulful eyes, he tells his girlfriend: "I've known this car my whole life. A 1949 Buick Roadmaster. Only 8,000 production models made. Straight 8. Fireball 8. First full year of the dynaflow transmission."

"It's a vivid display of the passionate attachment one can have for a car," says Kurt Meister, executive director of Aon Collector Car Insurance, in Bellevue, Washington. "It drives America's huge collector car hobby. And Aon insurance helps keep it running."

Visit any classic car show on any weekend, says Meister, and you'll meet thousands of Charlie Babbitts with stories to tell-how their first and forever crush was a car, not the girl next door; the car the rich kid in school used to get all the dates; or ones they fell in love with in favorite movies and television shows like the '57 Chevy BelAir in "Grease" and the bullet-like '69 Dodge Charger in "Dukes of Hazard."

Jim Kruse, assistant vice president of Aon Collector Car Insurance, grew up in a family of collectors and has his own stories to tell-about learning to drive in a 1926 Model T Ford Roadster, and his own collection of early 20th century cars, including a 1922 Wills Sainte Claire Roadster, one of 86 still in existence; and his trip to Paris in June to meet the grandson of one of the designers of his prized 1908 Sizaire-Naudin, one of only 12 in the world.

Ann Staadt of Fort Wayne, Indiana, a collector for 40 years with her husband, Richard, tells of the challenge of shipping a 1914 Fiat to New Zealand and the excitement of driving it through that exotic country. And just this summer, while touring in Norway in a 1930 Duesenberg, the couple had an unexpected but joyful reunion-with a car they had sold to a British collector who later sold it to a collector in Norway.

Staadt, who was the first woman president of Fort Wayne's Historical Automobile Association, sees more women embracing the hobby as their interest in cars goes beyond just driving. Industry magazines report that young women, especially, are now customizing their new cars with aftermarket parts like turbochargers, spoilers and Xenon headlights. How long before they fall for the sweet sounding "vroom, vroom!" of an older, dressed up car?

"Collecting a vintage or kit car is about connecting to a certain time or era," says Kruse. This has created a multi-billion dollar hobby with some eight million collectors whose arc can run from Hollywood entertainers and executives with 80 cars to a teenager tooling a beat-up '66 Mustang sitting on blocks in his driveway.

But the average collector lives somewhere in between: 54 years old, married, and college educated, with an average household income of $109,900. On average, 96% own a home valued at $246,900, and most likely own more than one collector vehicle.

With that affluent profile, collectors and their cars can be a profitable specialty niche for independent agents and brokers, says Meister. Aon offers coverage for just about any collector car, including antiques, classics, street rods, customs and vintage. "We have leveraged our worldwide experience by creating an easy-to-use program for our agent partners," he continues. "By listening to what our agents wanted, we created a program that offers a superior product, process and price." By targeting the collector car universe, Meister says the agent opens up numerous cross-selling opportunities, thus strengthening the relationship between agents and their clients by expanding their coverage portfolio.

One agent who is reaping the rewards of the Aon program and cross-selling is Mike March of Michael March Insurance in Fontana, California, who says that along with a competitive annual premiun ($250-$300) and unlimited mileage, the program provides other key features favored by collectors and strong selling points for agents and brokers.

One feature is Agreed Value Coverage, under which the collector and the company simply agree on a set value of the car. This coverage protects the car owner's investment and eliminates any hassle about the amount to be paid in a total loss claim.

A second unique feature offers collectors generous use of their cars. Unlike many policies which offer coverage only to and from car shows and parades, explains March, the Aon policy allows collectors to drive their cars to work on their birthdays or other special occasions, out to dinner, or to "cruise nights" to hang out with other collectors, usually in the parking lot of a popular restaurant. "Clearly, Aon wants collectors to enjoy their cars," says March, who writes more than 1,000 of its policies in California, Arizona and Nevada.