Whether at home or at a pro...
Whether at home or at a pro builder's shop, it's more than likely that your disassembled in-progress project would be in pieces all over the place. Keep a list of all the components so that everything can be insured.
Some companies require an outside appraisal, some don't, and some require an appraisal only on cars valued above a certain dollar amount (or if the amount provided by the customer doesn't seem to match the description and photos provided). We'll get into the subject of appraisals more thoroughly next month.
It's in your best interest to provide an accurate honest dollar value. Agents who work with specialty car companies are enthusiasts and are familiar with the high-dollar values of many street rods-but they'll also know if you're valuing your homebuilt backyard project like it's a Ridler winner. They recommend determining a dollar value based on the current market value-what you could reasonably expect to sell your car for-which in many cases is less than the actual cost of a professional build. But don't make the opposite mistake of low-balling the value to save a few bucks on your premium. You'll end up cheating yourself if your car gets totaled or stolen. Laura Bergan at American Collectors Insurance says that most of their customers have a very accurate idea of their car's value. "If we feel if it's off the mark a little bit, we'll give you a call to find out why you think the value is what you applied for."
All of the insurance representatives that we spoke to recommended re-evaluating your coverage on a regular basis. If the car is under construction or if improvements have been made to a finished car (new paint or upholstery, for example), call or email the insurance company to adjust the coverage based on those changes. Bergan told us that American Collectors automatically increases the agreed value by $500 every renewal. The company also offers an "inflation guard" for agreed value policies, which increases the value 2 percent every quarter.
Early and Often
"Some people are under the impression that you can't obtain insurance while the car's in progress," Bergan told us. "If it's not registered, we'll provide comprehensive for whatever value it has while it's under construction. Then when it's registered and ready for the road, we can add liability and collision."
Paul Jakubowski says that J.C. Taylor provides the similar coverage for projects and he encouraged car owners to remember to upgrade their insurance as improvements are made during the build. After it's finished, continue to re-assess its value as more upgrades are made.
If the car is going back into a shop for an extended period of time, you may want to consider dropping liability and collision and keeping comprehensive until it is back on the road, when you can re-add that coverage.
Some of the companies we spoke to provide coverage for existing customers who happen to buy a car somewhere, while they're towing it home. For example, if you bought a car at a swap meet or found one in the classifieds and had to move fast on it, your insurance provider might have your back. Not all companies provide this, so find out first. And remember to alert the insurance company of the new purchase as soon as possible.
What About Homeowner's Insurance?
Every insurance company representative we spoke to pointed out the misconception held by many car owners that their cars are protected by their homeowner's insurance. That is almost always not true. Even though the majority of claims involve accidents occurring at home, your homeowner's policy probably does not cover your car, whether the car is finished and parked in the garage or under construction in pieces in boxes. Maybe your situation is the exception to the rule, so check with your agent and get it in writing, but in most cases, cars and parts are not covered.
Getting Better all the Time
Thirty years ago, everyone had crazy stories about the friction between hot rodders and their insurance companies. Few auto insurance companies would even consider covering specialty cars, and agents were sometimes clueless about the value of hot rods or the habits of hot rodders.