Is your Porsche 911 properly insured?
If you believe insurance companies, risk is everywhere. We now have insurance for pets, insurance for teeth, insurance for water pipes running under the garden – all things our grandparents would have found bizarre.
In the old days, if the dog needed brain surgery, it was bye-bye dog. If your teeth fell out, too bad for your face. If the water main sprung a leak, you called the local shoveller and he fixed the pipe. No insurance companies were involved – still my preferred option.
Why pay £12 a month to insure a satellite box worth £40 on eBay? Why insure house keys against loss when you can give a friend or neighbour a spare set instead? What’s wrong with us that we now need insurance for things that didn’t matter 30 years ago? The whole thing drives me nuts.
What fries my head the most is, while many Porsche-owning friends stump up for hamster cover (hamsters costing £4), they leave their £40,000 pride and joy sitting on a classic car policy that pays out market value, neglecting to agree a valuation in advance. It’s madness.
As I wrote here a while back, I now work freelance as a writer and commercial consultant. Before making the move, I spent 25 years in the motor industry, buying and selling cars for trade and retail. The last ten years were spent as a valuation editor, watching the effect of market forces, and translating my observations into older car and modern classic values, for clients in the trade and the financial services industry; in other words, banks and insurance companies.
From my substantial experience in the valuation arena, I can say without a doubt that market value insurance policies on classic cars are the wrong way to go. If a piano lands on your classic Porsche tomorrow, market value will be unsatisfactory compensation.
Consider these facts. Fact 1; the words ‘market value’ give a claim assessor vast interpretative leeway. Fact 2; the classic Porsche market is generously peppered with substandard cars in need of work, most priced accordingly. Cut to a space where your classic Porsche used to be, and imagine trying to settle on a value for your long-gone pride and joy. Anyone happy using £8000 sheds as a barometer for their £20,000 to replace 3.2 Carrera needs their head examined.
I once read an interview with Eddie Irvine, where Irv was talking about how he no longer rides as a passenger in road cars. The decision came from an incident where he’d been a passenger in a road Ferrari spin at 100mph, and it was only when control of the situation was lost, that the driver realised how risky his perceived ‘safe’ situation had been. Such is life with a market value policy.
When it comes to classic car insurance, always agree a replacement value at policy inception when given the opportunity, using up-to-date opinion supplied by active trade sources. It’s the easiest way to ensure you will be quickly and adequately compensated should the worst ever happen.
Just as I’ll never insure dogs, dentures or drains, I’ll never leave the total loss of a car that cost £30,000 of my hard-earned cash open for debate. As the law insists we insure our cars for road use, maximise the effectiveness of the policy you’re obliged to buy and fix the replacement value in advance, updating it annually. If you’re not doing this, brace yourself for impact.