Hey all,
I have a question about insurance and the value of your cars! I have a 1965 Fastback that I have insured at 25K and have full coverage on it with Hagerty insurance! My questions has any one every have to claim that much with the insurance company when there classic car got totaled? My car is just fine and its locked up in the garage! Just asking to see if the insurance companies pay the full value of what the cars is insured for. Funny thing when I set the value of my car they only asked for pictures of my car, they never asked for the car to be appraised. I'd say my car is worth about 20K tops, but have it higher because I always here that the insurance companies never pay out the full amount of what the car is insured for, is this true? So if my car gets totaled will they pay out the full amount, or will I get the run around by them not wanting to pay the full 25K And no I’m not going to have someone hit my car, I’m just asking!

 

Basically yes (at least for Hagerty), IF the car is declared totaled by the insurance company then they will pay out the full value. This is of course provided you are declaring it thru your insurance company. Assuming you are not at fault, normally you would want to settle with their insurance and they are not bound by any value's you have with your agent. Obviously when you file a claim with your company then your rates will go up as well in the future.

Of course if you declare your car at an amount that is simply ludicrous to begin with they will investigate for fraud first before settling a claim. You pay more for having more coverage anyway as you well know, but obviously if the value is too high then it's harder to have the cost to fix excede the cars listed value meaning less of a chance getting it totaled. So for example lets just say we have two fairly equal 65 fastbacks and they are in the same type of accident, the entire rearend is smashed and trashed and the estiamte to fix is 15k. car A is insured for 18k and car B is 25k. Car A might make out better. They will not pay 15k to fix an 18k car, so they will total it and pay the whole 18k. They would likely give you the option of buying it back for 2 or 3k if you still wanted to fix it or you can move on. Car B they would not want to pay out so they would give you the check to fix it only, 15k. Now you are stuck because if you don't fix it then no one is going to give you 10k for the car as is and if you fix it you are stuck with a hobbled up car that is made up of a variety of parts. Unless you want to pay out of pocket for NOS parts of course.

So you see, honesty ends up being the best policy in the end. You are better off to list your car for it's actual value and make sure that you keep the policy current every year or two as needed, particularly with a company like Hagerty. Because the qualifications are harder to meet, they know your car spends less time on the road then off so they can afford to give you honest service and not play games.

The stories you hear about companies not paying out the full amount do not really apply to specialty insurance companies so much as they do for collectable cars that are on regular insurance since they aren't necessarily "agreed value" policies.